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YONEX (TSE:7906) Approves Restricted Stock Compensation, Is It Still Below Fair Value?

Simply Wall St · 1d ago

YONEX (TSE:7906) is back on investors radar after its 23 July 2026 board meeting, which included an agenda item on disposing of treasury stock as restricted stock compensation for eligible participants.

See our latest analysis for YONEX.

At a share price of ¥2,560.0, YONEX has seen a 1 day share price return of 2.32% and a year to date decline of 23.92%. The 5 year total shareholder return of 255.70% points to strong longer term gains, suggesting recent momentum has cooled compared with earlier years.

If this YONEX update has you thinking about what else might be setting up for the next multi year run, it could be worth reviewing the 10 top founder-led companies

YONEX is slipping on the year yet just bounced after the compensation news. Is this a reasonable moment to start building a position, or does it make more sense to wait for a clearer valuation cushion?

Price-to-Earnings of 18.1x: Is it justified?

On the latest numbers, YONEX trades on a P/E of 18.1x, which sits above both its estimated fair P/E of 15.3x and the peer average of 16x. At a share price of ¥2,560, the stock also screens as 35.1% below the SWS DCF fair value estimate of ¥3,943.52, so the earnings multiple and cash flow view are telling different stories.

The P/E ratio compares what investors pay today for each unit of current earnings. For a consumer durables company like YONEX, this often reflects expectations for future earnings growth, brand strength and the perceived resilience of its profit stream.

Here, the market is assigning YONEX a higher P/E than both the JP Leisure industry average of 15.3x and the peer average of 16x. That suggests investors are willing to pay more for each yen of earnings than they pay for comparable companies. The estimated fair P/E of 15.3x sits meaningfully lower than the current 18.1x. This points to a level the market could potentially move toward if sentiment or growth expectations cool.

Explore the SWS fair ratio for YONEX

Result: Price-to-Earnings of 18.1x (OVERVALUED)

However, recent share price weakness this year and any shift in demand for YONEX sporting goods or discretionary consumer spending could quickly challenge the current valuation story.

Find out about the key risks to this YONEX narrative.

Another View On YONEX Using Our DCF Model

The earnings multiple paints YONEX as expensive, yet the SWS DCF model points the other way. At ¥2,560, the stock trades about 35.1% below the DCF fair value estimate of ¥3,943.52, which frames the current price as undervalued on a cash flow basis. Which signal carries more weight for you?

Look into how the SWS DCF model arrives at its fair value.

7906 Discounted Cash Flow as at Aug 2026
7906 Discounted Cash Flow as at Aug 2026

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out YONEX for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 18 high quality undervalued stocks. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Next Steps

YONEX clearly splits opinion, with mixed signals on valuation and a balance of risks and rewards. If you want to move quickly and form your own judgment based on the full picture, start by reviewing the 3 key rewards and 1 important warning sign

Looking for more investment ideas beyond YONEX?

Do not stop at YONEX. The market rarely serves up only one interesting setup at a time, and the next idea could already be on your screen.

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.