Dai Nippon Printing (TSE:7912): Assessing Valuation After Revenue Growth and Profitability Pressures in First-Half 2025 Results

Dai Nippon Printing (TSE:7912) just released results for the first half of 2025, highlighting a 4% rise in net sales and a 22% jump in operating income. However, net income fell sharply, raising questions about underlying profitability.

See our latest analysis for Dai Nippon Printing.

Dai Nippon Printing’s recent update landed as the stock continues its climb, with a 19% year-to-date share price return and a total shareholder return of over 10% for the past year. Momentum appears to be building, fueled by robust progress in its core business and ongoing strategic shifts, even as profitability remains a concern.

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Given the solid sales gains alongside pressure on net income, the question for investors is whether Dai Nippon Printing’s recent success is already reflected in its current share price or if an attractive buying window remains open.

Price-to-Earnings of 12.6x: Is it justified?

Compared to its last close price of ¥2,662, Dai Nippon Printing currently trades at a price-to-earnings (P/E) ratio of 12.6x, which is notably below both its peer average and the estimated fair P/E ratio for the company.

The P/E ratio measures how much investors are willing to pay for each yen of earnings. It is a widely used barometer for relative value among stocks, especially in the Commercial Services sector. A lower P/E can signal that the market is undervaluing the company's earnings potential or is cautious about future growth.

For Dai Nippon Printing, the P/E ratio of 12.6x is attractive when compared to the industry average of 13.5x and an estimated fair P/E of 18.5x. This difference suggests that the market currently prices the company at a discount to both its peers and its own fair value level. The stock could potentially move closer to this level if expectations or sentiment shift positively.

Explore the SWS fair ratio for Dai Nippon Printing

Result: Price-to-Earnings of 12.6x (UNDERVALUED)

However, persistent net income declines and only modest annual revenue growth could signal limited upside if profitability continues to lag behind sales momentum.

Find out about the key risks to this Dai Nippon Printing narrative.

Another View: Discounted Cash Flow Perspective

Looking through the lens of our DCF model, Dai Nippon Printing appears to be trading at a significant discount to estimated fair value. The model suggests the share price could be nearly 28% below what fair value calculations indicate. However, it remains to be seen whether this gap points to hidden upside or reflects something the market anticipates.

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 Dai Nippon Printing 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 879 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 Dai Nippon Printing Narrative

If you have your own perspective on Dai Nippon Printing or want to dig deeper into the figures, you can easily craft your own story in just a few minutes, so why not Do it your way

A great starting point for your Dai Nippon Printing research is our analysis highlighting 2 key rewards and 1 important warning sign that could impact your investment decision.

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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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