Is Daifuku’s Strong 77% Rally Justified After Latest Automation Demand Surge?

If you’ve been keeping an eye on Daifuku, you’re probably asking yourself whether now’s the moment to buy, hold, or consider another move. The stock has rewarded patient shareholders with a truly stellar run, posting a 77.2% gain over the past year and a remarkable 117.0% jump over three years. Even in just the past week, Daifuku notched a 3.9% increase. These returns have left many investors wondering if there’s more fuel left for growth, or if today’s price already bakes in a lot of good news and optimism.

The recent momentum isn’t happening in a vacuum. As global supply chains invest in automation, Daifuku’s reputation as a logistics and material handling leader has attracted plenty of attention. There’s a sense in the market that the company is both riding and set to benefit further from big-picture shifts in how goods move around the world. That said, growth stocks that have rallied this hard can sometimes run ahead of their fundamentals, and risk perceptions tend to evolve quickly in today’s market.

Looking at valuation, Daifuku’s current value score sits at zero out of six checks for being undervalued, making it clear that by traditional benchmarks, the stock doesn’t screen cheap at this level. But are these measures telling the full story? Next, let’s dive into the main ways analysts weigh a stock’s valuation, and see what they reveal about Daifuku, plus a smarter way to look at value that you won’t want to miss.

Daifuku scores just 0/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.

Approach 1: Daifuku Discounted Cash Flow (DCF) Analysis

The Discounted Cash Flow (DCF) model estimates a company’s value by projecting its future cash flows and then discounting them back to the present. This approach aims to show what Daifuku is worth today based on how much cash it is expected to generate over time.

Currently, Daifuku generates Free Cash Flow (FCF) of ¥116.2 billion. Analyst estimates cover FCF projections for the next five years, with Simply Wall St extrapolating further out. By 2029, FCF is projected to reach nearly ¥84.7 billion, and the 10-year estimate for 2035 sits at approximately ¥102.0 billion. All of these projections are in Japanese yen (¥).

Based on the 2 Stage Free Cash Flow to Equity model, the intrinsic value for Daifuku is calculated at ¥4,427 per share. When compared to the current share price, this means the stock is about 6.0% above its fair value level, indicating it may be slightly overvalued according to this method.

Result: ABOUT RIGHT

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

Simply Wall St performs a valuation analysis on every stock in the world every day (check out Daifuku's valuation analysis). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes.

Approach 2: Daifuku Price vs Earnings (PE)

The Price-to-Earnings (PE) ratio is one of the most reliable metrics for valuing established, profitable companies like Daifuku. Since it directly relates a stock’s price to its earnings, it accounts for how much investors are willing to pay for each yen of profit a company generates. Growth expectations and risk play a big role in what counts as a “fair” PE. Faster-growing, lower-risk businesses tend to justify higher PE ratios, while slower-growing or riskier firms usually deserve lower ones.

Daifuku’s current PE ratio is 23.7x. That is not only higher than the Machinery industry average of 13.6x but also above the typical peer at 20.8x. On the surface, this suggests investors may be pricing in stronger earnings growth or better prospects for Daifuku compared to competitors. However, raw comparisons can be misleading if they do not consider unique factors such as profit margin, market cap, or risk profile.

This is where Simply Wall St’s propriety “Fair Ratio” comes in. The Fair Ratio for Daifuku is 20.3x. This calculation integrates the company’s own growth outlook, margins, risk, and its industry position. This approach offers a more individualized benchmark rather than the blanket averages found with basic peer or industry comparisons. Given Daifuku’s actual PE is close to its Fair Ratio, it appears the stock is trading about where you would expect once you factor in all its fundamentals.

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 Daifuku Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives. A Narrative is simply your story behind the numbers; it is your personal perspective on the company’s future, combining your own predictions for fair value, revenue, earnings, and profit margins. Narratives bridge the gap between Daifuku’s financial forecasts and its fair value, helping you see exactly how your view of the business translates into investment decisions.

Narratives are accessible and easy to use on Simply Wall St’s Community page, where millions of investors can share and update their outlooks. By using Narratives, you can decide when to buy or sell by directly comparing your fair value to the current price. Best of all, Narratives update automatically whenever new announcements, news, or earnings come out, ensuring your decisions remain relevant and up to date.

For example, one investor’s Narrative might see Daifuku’s future as especially bright and value the company at a premium; another could take a more cautious view and place a much lower fair value. No matter where you stand, Narratives help make your decision-making smarter, more flexible, and grounded in your own analysis.

Do you think there's more to the story for Daifuku? 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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