WEBULL
WebtradeDownload

NEXTAGE (TSE:3186) Could Be 35% Below Fair Value On Strong Nine Month Results

Simply Wall St · 1d ago

NEXTAGE (TSE:3186) moved into focus after reporting nine month sales of ¥600,422 million and net income of ¥13,845 million, alongside fresh full year guidance issued on 5 October 2026.

Despite the strong nine month update, NEXTAGE’s recent trading tells a mixed story. The 1 day share price return of 2.43% comes after a 30 day share price decline of 7.58% and a 90 day share price fall of 21.46%, while the 1 year total shareholder return of 5.22% and 3 year total shareholder return of 31.13% point to momentum that has been built over a longer horizon.

Scan how NEXTAGE compares with other Japanese retailers showing strong earnings momentum and solid financial profiles through our hand picked list of solid balance sheet and fundamentals (21 results)

Bulls see NEXTAGE’s stronger nine month figures and fresh guidance as a reset point after the share price slide. Bears argue the recent volatility flags risk. Which case do the current valuation markers support?

Preferred P/E multiple of 11.3x: Is it justified?

On current figures, NEXTAGE trades on a P/E of 11.3x, and that level looks modest when set against both peers and its own recent progress.

The P/E ratio compares the share price with earnings per share. For a retailer like NEXTAGE, it effectively tells you how much investors are paying for each unit of current profit, which is especially relevant when earnings are positive and the business has a clear record of profitability.

Earnings growth has been strong, with profit up by 108.9% over the past year compared with a 5 year average of 4.8% per year. Management has delivered higher net profit margins of 2.4% versus 1.4% last year. Against that backdrop, a P/E of 11.3x is below the JP Specialty Retail industry average of 13.1x and below the estimated fair P/E of 16.6x. This suggests the valuation could have room to move closer to that fair ratio level if current fundamentals persist.

Explore the SWS fair ratio for NEXTAGE.

Result: Price-to-earnings of 11.3x (UNDERVALUED)

Still, NEXTAGE’s recent 90 day share price fall of 21.46% and its concentration in the Japanese auto market leave the story sensitive to sentiment shifts.

Find out about the key risks to this NEXTAGE narrative.

Another view on NEXTAGE value

The P/E points to NEXTAGE looking inexpensive, and the SWS DCF model adds a stronger claim. On that framework, the current share price of ¥2,694 sits below an estimated future cash flow value of ¥4,162.27, which implies the shares screen as undervalued on cash generation potential. How much weight do you give to that kind of model driven view?

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

3186 Discounted Cash Flow as at Oct 2026
3186 Discounted Cash Flow as at Oct 2026

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out NEXTAGE 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 12 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

Mixed signals or early opportunity? Act while the market is still debating the NEXTAGE story and weigh both sides by checking the 4 key rewards and 2 important warning signs.

Looking for more NEXTAGE style investment ideas?

If you stop with just NEXTAGE, you risk missing other opportunities that fit your goals just as well or even better across quality, value, and resilience.

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.