Is Mizuho Still a Good Investment After Its 80% Surge and Record Earnings in 2025?

Trying to decide what to do with Mizuho Financial Group stock right now? You are not alone. After all, whether you have been holding on through its extraordinary multi-year climb or just started researching Japanese financials, Mizuho’s recent moves are hard to ignore. With a year-to-date return topping 25.1% and a staggering 79.8% rally over the past year, the stock has captured a lot of market attention. Stretch that out even further and you will find Mizuho up an eye-popping 231.2% over three years and 336.0% over five years. Those numbers would make any long-term investor smile.

As for what is driving these gains, much of the momentum can be traced to shifting perceptions of risk in Japan’s banking sector and renewed global interest in financial stocks. Factors like regulatory changes and changing market conditions have encouraged investors to reconsider the growth potential of major Japanese banks, with Mizuho right in the spotlight. Of course, the ride has not been entirely smooth, but those big-picture trends have helped set the tone for the impressive appreciation.

If you are wondering whether it is too late to buy or if there is still value left to uncover, this is where a step-by-step look at valuation really matters. Mizuho scores a 4 out of 6 on our value scale, earning points for being undervalued in four different checks. But what exactly does that score mean? Next, let’s break down these valuation methods, and see what story they really tell about the company’s true worth. Plus, stay tuned for a smarter way to cut through the noise at the end of the article.

Mizuho Financial Group delivered 79.8% returns over the last year. See how this stacks up to the rest of the Banks industry.

Approach 1: Mizuho Financial Group Excess Returns Analysis

The Excess Returns valuation model evaluates how much value a company creates above its cost of equity capital. This approach is particularly useful for banks like Mizuho Financial Group because it focuses on returns generated from shareholders’ equity compared to what is required to compensate investors for risk.

Mizuho’s latest figures show a book value of ¥4,217.53 per share. Based on weighted future Return on Equity estimates from nine analysts, the company’s stable earnings per share are projected at ¥498.62. With a cost of equity of ¥310.73, Mizuho is delivering an excess return of ¥187.90 per share, suggesting that the firm consistently earns more than its equity costs. The average return on equity is 10.28%, while the stable book value is projected at ¥4,851.67 per share, signaling expectations for steady asset and earnings growth ahead.

According to these calculations, the Excess Returns model implies an intrinsic value that is 39.6% above the current share price. By this measure, the stock appears to be significantly undervalued.

Result: UNDERVALUED

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Mizuho Financial Group.

Our Excess Returns analysis suggests Mizuho Financial Group is undervalued by 39.6%. Track this in your watchlist or portfolio, or discover more undervalued stocks.

Approach 2: Mizuho Financial Group Price vs Earnings

Price-to-Earnings (PE) is the go-to metric for valuing established, profitable companies like Mizuho Financial Group because it directly relates a company's share price to its actual earnings. This allows investors to quickly gauge how much they are paying for each unit of profit, making it a practical and widely trusted measure for bank stocks with solid, consistent performance like Mizuho.

The “right” PE ratio is not set in stone. Growth expectations and risk both play a major role. Companies with stronger growth prospects or lower risks usually command higher PE ratios, while those facing uncertainty or slower earnings growth trade closer to the average, or even at a discount.

Mizuho currently trades on a PE ratio of 13.63x. That is just above the broader banks industry average PE of 11.22x, but below the peer group average of 20.00x. However, Simply Wall St's proprietary “Fair Ratio” for Mizuho, which factors in its unique earnings growth, profit margin profile, industry placement, market cap, and risk measures, is 15.91x. This approach delivers a more tailored benchmark than simply comparing with peer or industry averages because it adjusts for the specific strengths and challenges faced by Mizuho.

Because Mizuho's current PE of 13.63x sits modestly below its Fair Ratio, this suggests the stock trades at a reasonable price when all key factors are considered. The difference is not dramatic, so investors can see its current valuation as pretty fair.

Result: ABOUT RIGHT

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Mizuho Financial Group Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let’s introduce you to Narratives. Narratives are a powerful tool that let you tell your own story about a company, matching your perspective on its future (like your estimates for revenue, earnings, and margins) with a clear, transparent forecast and a calculated fair value. Instead of simply relying on generic ratios or single-point analyst targets, Narratives help you define why you think a company is undervalued, fairly priced, or expensive, and connect your story directly to the numbers.

Accessible for anyone from beginner to seasoned investor, Narratives can be easily created and compared on the Community page at Simply Wall St, where millions participate. With Narratives, you can track how your assumptions stack up against other investors, and see instantly how changes in news, earnings, or events update fair value and outlook in real time. For example, optimistic investors might believe Mizuho’s successful partnerships and cost controls will support the highest analyst price target of ¥6,070, while those more cautious about rising costs or integration risks could lean toward the lowest target of ¥3,800. Both stories are backed by different forecasts and assumptions, and Narratives put the decision-making power directly in your hands.

Do you think there's more to the story for Mizuho Financial Group? Create your own Narrative to let the Community know!

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.

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