Creek & River (TSE:4763) 24.3% Earnings Growth Reinforces Bullish Growth Narratives

Creek & River (TSE:4763) closed out the latest period with net profit margins of 5.7%, an increase from 4.8% the previous year. The company posted an impressive 24.3% earnings growth over the past twelve months, outpacing its five-year average annual growth of 7.7%. Long-term performance remains steady, with earnings rising by an average of 7.7% per year over five years. Looking ahead, forecasts put annual earnings growth at 13.1% and revenue growth at 11.1%, both well ahead of the Japanese market averages of 8.1% and 4.4% respectively. Investors are likely to note the attractive price-to-earnings ratio of 10.2x, which sits below peer and sector averages, and the fact that shares trade below their estimated fair value. No new risks were flagged, and a cluster of positive signals such as value, growth, and an attractive dividend may boost optimism around these results.

See our full analysis for CREEK & RIVER.

The next section stacks these results against the most widely discussed narratives, so you can see which market stories align with the actual numbers and which get left behind.

Curious how numbers become stories that shape markets? Explore Community Narratives

Margins Hold Firm at 5.7%

• Net profit margin held at 5.7% for the year, maintaining its position above last year's 4.8% and demonstrating steady profitability relative to sector norms.
• The current margin trend aligns with a cautiously optimistic outlook, as steady operational results and lack of negative surprises reinforce the company’s reputation for reliable execution.
  • Stable margins and absence of shocks suggest management is delivering on operational stability, which is a key theme in prevailing market analysis.
  • While not aggressively expanding, Creek & River’s ability to maintain profitability in line with sector trends underlines the company’s defensive characteristics, as highlighted in news coverage and sector context.

Earnings Growth Outpaces Market

• Earnings jumped by 24.3% over the last year, significantly ahead of the company’s five-year annual average of 7.7% and the Japanese market’s expected 8.1% per year.
• Outperformance against both the company’s history and the market supports a constructive case that Creek & River's earnings momentum is not only consistent but accelerating.
  • Forecasts for 13.1% future earnings growth and 11.1% revenue growth show a positive long-term trajectory, outstripping underwhelming sector averages of 8.1% and 4.4%.
  • With no reported risks in the latest filing, this durability addresses the market’s focus on operational consistency within the sector, further supporting views of business stability and credible upside.

Valuation Undercuts Peers and Fair Value

• Creek & River’s price-to-earnings ratio stands at 10.2x, trading at a discount compared to the peer average (12.9x) and the industry average (16x), and the current share price of 1,449.00 remains well below the DCF fair value of 3,799.73.
• Discounted valuation strongly supports the thesis that the company is undervalued based on fundamentals, providing a margin of safety that is rare among industry peers.
  • The share price discount compared to DCF fair value and to key sector multiples indicates investors may not be fully pricing in the company’s quality of earnings or projected growth.
  • Sector context points to gradual growth and digital tailwinds, but Creek & River’s metrics stand out as especially attractive for value-focused investors compared to the broader professional services space.

See our latest analysis for CREEK & RIVER.

Next Steps

Don't just look at this quarter; the real story is in the long-term trend. We've done an in-depth analysis on CREEK & RIVER's growth and its valuation to see if today's price is a bargain. Add the company to your watchlist or portfolio now so you don't miss the next big move.

See What Else Is Out There

While Creek & River’s valuation and growth rates are impressive, its earnings expansion has been more gradual over the long term compared to some market leaders.

If you want to prioritize steady gains and predictable performance, consider using our stable growth stocks screener to spot companies delivering reliable results across different market environments.

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