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Mips (OM:MIPS) Could Be 21% Undervalued Following Strong Earnings Growth

Simply Wall St · 23h ago

Mips (OM:MIPS) drew fresh investor attention after reporting second quarter and first half 2026 earnings, with higher sales, net income and earnings per share compared with the same periods a year earlier.

See our latest analysis for Mips.

The earnings release appears to have shifted sentiment in the short term, with Mips posting a 30 day share price return of 62.01% and a 90 day share price return of 38.42%. Over a longer horizon, however, the 1 year total shareholder return declined 7.84% and the 5 year total shareholder return declined 54.42%, suggesting that recent momentum is building off a weaker long term base.

If these moves have you rethinking where growth could come from next, it may be worth widening your search with 107 top founder-led companies

After that sharp move in Mips, the share price now sits well below both analyst targets and one estimate of intrinsic value. How wide is the gap between recent optimism and what the business might reasonably be worth?

Most Popular Narrative: 20.8% Undervalued

On the most followed narrative, Mips is priced below an estimated fair value of SEK492, compared with the latest close at SEK389.80. This frames the recent share price swing in a different light.

Mips’ financial position, with improvements in EBIT and operating cash flow, demonstrates operational efficiency. This is expected to support margins and earnings even with short-term challenges such as tariff issues.

Read the complete narrative.

Want to see what underpins that fair value for Mips? The narrative focuses on faster top line expansion, rising profitability and a richer earnings multiple. This is how those pieces are combined to reach SEK492.

Result: Fair Value of SEK492 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, the case for Mips also depends on tariff uncertainty and legal costs not eroding margins or unsettling key U.S. customers in a more persistent way.

Find out about the key risks to this Mips narrative.

Another View: What Mips’ P/E Is Telling You

While the narrative sees Mips as 20.8% undervalued, the current P/E of 79.4x paints a different picture. That multiple is well above both peers at 49.7x and a fair ratio of 30.4x, which points to meaningful valuation risk if expectations cool.

If you prefer to gauge Mips using earnings multiples rather than cash flow models, it is worth testing how comfortable you are with paying such a premium for growth that is still forecast rather than delivered, and what would need to go right for that gap to feel justified over time.See what the numbers say about this price — find out in our valuation breakdown.

OM:MIPS P/E Ratio as at Jul 2026
OM:MIPS P/E Ratio as at Jul 2026

Next Steps

If the mixed signals around Mips have you unsure, this is a good time to review the full picture yourself and weigh both sides with 3 key rewards and 1 important warning sign

Looking for more investment ideas beyond Mips?

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.