Has Fanuc’s 52% Rally Outrun Its Long Term Automation Growth Prospects in 2025?

• If you are wondering whether Fanuc is still a smart buy after its big run up, or if the easy money has already been made, this breakdown will help you think through whether the current price matches the company’s long term potential.
• Fanuc’s share price has climbed sharply: up 18.0% over the last week, 19.0% over the past month, and 45.1% year to date, with a 52.4% gain over the last year that suggests market expectations have shifted significantly.
• Much of this momentum has been linked to renewed optimism around factory automation and robotics demand, as global manufacturers increase investment in automation to address labor shortages and improve efficiency. At the same time, investors are reacting to headlines about reshoring trends and industrial spending cycles, both of which can influence Fanuc’s order book and perceived growth runway.
• Despite that strength, Fanuc currently scores just 0 out of 6 on our valuation checks, which suggests the market may be paying a premium for quality and growth. In the rest of this article we will walk through different valuation methods to see what they imply for Fanuc, then finish by exploring a more holistic way to think about valuation that goes beyond the numbers alone.

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

Approach 1: Fanuc Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow model estimates what a business is worth by projecting the cash it can generate in the future and discounting those cash flows back to today. For Fanuc, this 2 Stage Free Cash Flow to Equity model starts from last twelve month free cash flow of about ¥192.7 billion and then applies analyst forecasts for the next several years, with longer term projections extrapolated by Simply Wall St.

Under this approach, Fanuc’s free cash flow is expected to rise to roughly ¥217.5 billion by 2035, with mid single digit annual growth as the business matures. Each of these future cash flows is discounted back to a present value and summed to arrive at an intrinsic value estimate of around ¥3,707 per share.

Compared with the current market price, the DCF suggests Fanuc is about 60.0% overvalued. This implies investors are paying a significant premium over this cash flow based estimate of fair value.

Result: OVERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Fanuc may be overvalued by 60.0%. Discover 908 undervalued stocks or create your own screener to find better value opportunities.

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

Approach 2: Fanuc Price vs Earnings

For a profitable business like Fanuc, the price to earnings ratio is a useful way to judge whether investors are paying a reasonable price for each unit of current earnings. In general, companies with stronger growth prospects and lower perceived risk can justify a higher normal or fair PE ratio, while slower growing or riskier firms tend to trade on lower multiples.

Fanuc currently trades on a PE of about 35.2x, which is well above both the broader Machinery industry average of roughly 12.6x and the peer group average of around 24.0x. At first glance, that suggests the market is assigning Fanuc a sizable quality and growth premium relative to its sector.

Simply Wall St’s Fair Ratio metric estimates what a reasonable PE multiple should be for Fanuc, given its earnings growth outlook, profit margins, size, industry and risk profile. This tends to be more informative than simple peer or industry comparisons, which can overlook differences in fundamentals. For Fanuc, the Fair Ratio is 25.2x, noticeably below the current 35.2x, implying the shares are trading richer than what its fundamentals alone would justify.

Result: OVERVALUED

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1442 companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Fanuc Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives. This is a simple framework that lets you attach a clear story to your numbers by stating what you believe about Fanuc’s future revenue, earnings and margins, and then seeing what fair value those assumptions imply. A Narrative connects three pieces: the business story you believe, the financial forecast that follows from that story, and the fair value that those forecasts point to, so you always know why a price makes sense to you. On Simply Wall St’s Community page, millions of investors use Narratives as an easy, accessible tool to turn their views into structured forecasts and fair values, then compare those to Fanuc’s current share price to decide whether it looks like a buy, a hold, or a sell. Narratives update dynamically as new data like earnings reports or major news arrives, so your fair value view evolves with the facts. For example, one Fanuc Narrative might assume faster factory automation adoption and a higher fair value, while another assumes slower demand and a lower fair value, yet both are transparent about the story and numbers behind them.

Do you think there's more to the story for Fanuc? Head over to our Community to see what others are saying!

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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