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MIGALO HOLDINGS Inc.'s (TSE:5535) 26% Share Price Plunge Could Signal Some Risk

Simply Wall St · 2d ago

Unfortunately for some shareholders, the MIGALO HOLDINGS Inc. (TSE:5535) share price has dived 26% in the last thirty days, prolonging recent pain. The drop over the last 30 days has capped off a tough year for shareholders, with the share price down 15% in that time.

In spite of the heavy fall in price, you could still be forgiven for feeling indifferent about MIGALO HOLDINGS' P/E ratio of 15.6x, since the median price-to-earnings (or "P/E") ratio in Japan is also close to 14x. However, investors might be overlooking a clear opportunity or potential setback if there is no rational basis for the P/E.

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MIGALO HOLDINGS certainly has been doing a great job lately as it's been growing earnings at a really rapid pace. It might be that many expect the strong earnings performance to wane, which has kept the P/E from rising. If that doesn't eventuate, then existing shareholders have reason to be feeling optimistic about the future direction of the share price.

Check out our latest analysis for MIGALO HOLDINGS

pe-multiple-vs-industry
TSE:5535 Price to Earnings Ratio vs Industry December 11th 2025
Want the full picture on earnings, revenue and cash flow for the company? Then our free report on MIGALO HOLDINGS will help you shine a light on its historical performance.

Is There Some Growth For MIGALO HOLDINGS?

There's an inherent assumption that a company should be matching the market for P/E ratios like MIGALO HOLDINGS' to be considered reasonable.

If we review the last year of earnings growth, the company posted a terrific increase of 64%. Still, incredibly EPS has fallen 27% in total from three years ago, which is quite disappointing. Accordingly, shareholders would have felt downbeat about the medium-term rates of earnings growth.

Comparing that to the market, which is predicted to deliver 9.1% growth in the next 12 months, the company's downward momentum based on recent medium-term earnings results is a sobering picture.

In light of this, it's somewhat alarming that MIGALO HOLDINGS' P/E sits in line with the majority of other companies. It seems most investors are ignoring the recent poor growth rate and are hoping for a turnaround in the company's business prospects. There's a good chance existing shareholders are setting themselves up for future disappointment if the P/E falls to levels more in line with the recent negative growth rates.

The Final Word

Following MIGALO HOLDINGS' share price tumble, its P/E is now hanging on to the median market P/E. Using the price-to-earnings ratio alone to determine if you should sell your stock isn't sensible, however it can be a practical guide to the company's future prospects.

We've established that MIGALO HOLDINGS currently trades on a higher than expected P/E since its recent earnings have been in decline over the medium-term. Right now we are uncomfortable with the P/E as this earnings performance is unlikely to support a more positive sentiment for long. If recent medium-term earnings trends continue, it will place shareholders' investments at risk and potential investors in danger of paying an unnecessary premium.

There are also other vital risk factors to consider before investing and we've discovered 3 warning signs for MIGALO HOLDINGS that you should be aware of.

Of course, you might find a fantastic investment by looking at a few good candidates. So take a peek at this free list of companies with a strong growth track record, trading on a low P/E.