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YONEX (TSE:7906) Lifted Its Guidance, Is It Fully Priced?

Simply Wall St · 1d ago

YONEX (TSE:7906) raised its earnings guidance for the half year to September 2026 and the full year to March 2027 after reporting first quarter sales of ¥45,468 million and net income of ¥5,590 million.

See our latest analysis for YONEX.

The raised guidance arrives after a period where YONEX’s short term share price momentum has picked up, with a 7 day share price return of 4.79% and a 90 day share price return of 9.37%. This comes even though the year to date share price return is down 18.10% and the 1 year total shareholder return has declined 34.14%. These figures are set against much stronger 3 and 5 year total shareholder returns of 118.35% and 284.45% respectively, which suggests longer term holders have still seen substantial value creation.

If this earnings upgrade has you looking beyond YONEX, it could be a good moment to widen your watchlist and check out 12 top founder-led companies

So is YONEX’s recent rebound a simple mood shift after a weak year, or a clearer read on a business now guiding to higher earnings? The valuation numbers are where that tension really shows up.

Price to earnings of 17.5x for YONEX: Is it justified?

On simple earnings metrics, YONEX does not screen as cheap. The stock trades on a P/E of 17.5x, which is higher than both the JP Leisure industry average of 15.9x and the peer average of 15.8x, even though the company is guiding to higher earnings.

The P/E ratio compares YONEX’s share price with its earnings per share and is a common way investors gauge how much they are paying for current profits. For a consumer durables and leisure business with forecast earnings growth of 8.68% per year and a Return on Equity of 15.7%, a richer P/E can signal that the market is comfortable paying up for its earnings quality. It can also mean expectations are already built into the price.

Against that backdrop, YONEX’s P/E is also above the estimated fair P/E of 15x that the SWS model suggests the market could move towards over time. Compared with both the industry and this fair ratio benchmark, the stock currently looks priced at a premium rather than at a discount.

Explore the SWS fair ratio for YONEX

Result: Price-to-earnings of 17.5x (OVERVALUED)

However, there are still risks that could challenge the recent YONEX share price rebound, including any setback to its earnings guidance or any reversal in shareholder returns.

Find out about the key risks to this YONEX narrative.

Another view on YONEX using DCF

The P/E ratio presents YONEX as expensive, while the SWS DCF model suggests the opposite. At a share price of ¥2,756, the stock is trading below an estimated future cash flow value of ¥4,069.25, which points to an undervalued setup rather than a stretched one. Which signal matters more to you?

For a closer look at how this cash flow based view is built, and where the key assumptions sit, 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 27 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

Given the mixed signals around YONEX’s valuation and guidance, it makes sense to look at the details yourself and move quickly if needed. To see what investors view as the key positives, start by reviewing the 3 key rewards.

Looking for more investment ideas beyond YONEX?

If you are reassessing YONEX today, do not stop there. Use this moment to scan other stocks quickly and line up your next potential ideas with confidence.

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.