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Is ROHM (TSE:6963) Undervalued As New 650V IGBTs Meet A Richer P S Multiple?

Simply Wall St · 1d ago

ROHM (TSE:6963) is back in focus after announcing its fourth-generation 650V IGBTs for automotive and industrial uses, designed for higher efficiency, improved short-circuit tolerance, and compliance with key automotive reliability standards.

ROHM’s recent 2.91% 1-day share price return and 0.89% 7-day share price return suggest investors are reacting positively to developments like the new 650V IGBTs, even though the 90-day share price return is down 7.53% after a very strong 113.96% year-to-date share price return and 142.50% 1-year total shareholder return. This points to strong longer term momentum with some near term cooling.

Spot similar electrification stories in semiconductors by scanning our hand picked 55 AI infrastructure stocks, which are also building the backbone for higher voltage and power hungry applications.

Bulls point to ROHM’s strong recent run and new power devices, while bears flag the current loss and past pullback. Which side does the valuation support next as investors weigh growth against earnings pressure?

Most Popular Narrative: 15.5% Undervalued

ROHM's most followed narrative pegs fair value at ¥5,764 compared with the last close of ¥4,873, which frames the recent share price strength against a higher long term target.

ROHM is planning to increase its production capacity and efficiency for SiC (silicon carbide) power devices, correlating with expected battery EV market growth, which should enhance revenue and earnings as demand eventually picks up. The company is implementing a new organizational structure to better cater to customer needs and market applications, which aims to improve sales and potentially increase net margins by offering more integrated, solution-based proposals.

Read the complete narrative.

Want to see what has to go right for ROHM to justify that higher fair value? The narrative leans on faster top line growth, rising margins and a richer profit multiple. It can be useful to understand which of those levers carries the most weight in the model and how sensitive the outcome is to small changes.

The narrative also anchors everything to a 10.6% discount rate, which shapes how much today's price reflects those future cash flows once they are pulled back to present value. That framing matters if you are comparing ROHM with other semiconductor stocks that may use different growth and risk assumptions in their fair value work.

Result: Fair Value of ¥5,764 (UNDERVALUED)

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

However, ROHM's current loss of ¥152,403 million and pressure in industrial and automotive demand could challenge the upbeat SiC and margin improvement story.

Find out about the key risks to this ROHM narrative.

Another View on ROHM Using Sales Multiples

The 15.5% undervalued fair value narrative for ROHM contrasts sharply with how the market is pricing its sales today. The stock trades on a P/S ratio of 3.8x, while the fair ratio is 2.8x and the JP Semiconductor industry average is 2.7x. Peer averages are even lower at 2.2x, which points to a richer valuation and raises the question of whether investors are paying up too far in advance of the expected earnings recovery.

See what the numbers say about this price — find out in our valuation breakdown.

TSE:6963 P/S Ratio as at Sep 2026
TSE:6963 P/S Ratio as at Sep 2026

Next Steps

With all this mixed sentiment around ROHM, it makes sense to check the numbers for yourself and move quickly to form your own view. Start by weighing its 1 key reward and 1 important warning sign

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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.