MonotaRO (TSE:3064) Valuation: Assessing the Stock After Strong October 2025 Sales Growth

MonotaRO (TSE:3064) announced its October 2025 non-consolidated sales, reporting a rise to JPY 29,423 million from JPY 25,354 million a year earlier. This sharp increase has caught investors’ attention.

See our latest analysis for MonotaRO.

MonotaRO’s latest sales surge seems to have brought renewed optimism, helping the stock notch a 14.2% share price gain over the past month. However, the 1-year total shareholder return remains negative. Momentum appears to be building again, reflecting investors’ improving expectations for the business.

If strong momentum stories appeal to you, this could be a perfect moment to broaden your approach and discover fast growing stocks with high insider ownership

With MonotaRO’s shares rebounding and sales growth outpacing previous years, investors face a key decision: is the stock trading at a bargain, or is the market already factoring in the company’s future growth prospects?

Price-to-Earnings of 34.6x: Is it justified?

MonotaRO’s current price-to-earnings ratio stands at 34.6x, significantly above both its industry peers and estimated fair value benchmarks. This indicates that the stock is trading at a premium to comparable companies.

The price-to-earnings (P/E) ratio measures how much investors are willing to pay for each yen of company earnings. It is especially relevant for established, profitable businesses like MonotaRO. A high P/E suggests the market anticipates faster or more reliable future profit growth.

MonotaRO’s multiple is notably higher than the JP Trade Distributors industry average of 10.1x. Compared to the estimated fair P/E ratio of 23.9x, the current market price reflects a substantial premium. This level may imply that shareholder optimism is outpacing fundamentals or that the market expects standout performance to continue well above the norm.

Explore the SWS fair ratio for MonotaRO

Result: Price-to-Earnings of 34.6x (OVERVALUED)

However, slowing long-term returns and recent volatility could challenge the bullish outlook if sales or profit momentum weakens from this point.

Find out about the key risks to this MonotaRO narrative.

Another View: The DCF Perspective

While MonotaRO looks expensive when focusing on earnings multiples, our SWS DCF model suggests a very different story. Based on projected future cash flows, the company appears to be trading at roughly 20% below its fair value. Could this signal an opportunity the market is missing?

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

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out MonotaRO 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 894 undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own MonotaRO Narrative

If you see things differently, or want to dig into the numbers yourself, you can shape your own perspective in just a few minutes, then Do it your way

A great starting point for your MonotaRO research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision.

Looking for more investment ideas?

Smart investors never stop at just one opportunity. Level up your portfolio by checking these hand-picked ways to get ahead before market trends leave you behind.

• Snap up early potential by tapping into these 3583 penny stocks with strong financials with robust financials and solid growth stories you might otherwise overlook.
• Tap into steady income streams by searching for these 18 dividend stocks with yields > 3% that consistently reward shareholders and help strengthen your long-term gains.
• Ride the wave of technological transformation with these 27 AI penny stocks, where artificial intelligence companies are changing industries and redefining what is possible.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com