How Does YONEX Stack Up After Its Global Expansion Headlines and Recent Price Drop?

• Wondering if YONEX's impressive run means it's undervalued, overhyped, or something in between? You're not alone. We're here to break it down together.
• While the stock delivered a 76.7% return over the past year (and more than 500% over five years), the last month saw a noticeable pullback of -9.0%. This reminds investors that rapid gains can come with swings in price and sentiment.
• Recent news coverage has highlighted YONEX's international expansion and the buzz from its visibility at major global sports events. These developments are fueling attention and likely impacting recent price movements. With the company capturing headlines for strategic growth and standout athlete partnerships, it is no surprise the ticker has become a talking point again.
• Despite the buzz, YONEX has a valuation score of 1 out of 6 (where a higher score means more undervalued checks passed). This raises the question: how should investors really measure its worth? We'll look at the usual valuation yardsticks and hint at an even smarter way to assess value before we wrap up.

YONEX scores just 1/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.

Approach 1: YONEX Discounted Cash Flow (DCF) Analysis

The Discounted Cash Flow (DCF) model estimates a company's true worth by projecting its future cash flows and discounting them to today's value. This approach relies on the concept that the value of a business comes from the cash it can generate for shareholders over time.

For YONEX, the latest reported Free Cash Flow (FCF) is ¥4,068 million. Analysts forecast steady growth, expecting FCF to reach ¥13,788 million by 2030. The projections for the next five years are based on analyst estimates, while numbers beyond that are calculated using forecast models. These figures provide insight into the company’s ability to generate cash in the upcoming decade.

The DCF model calculates an intrinsic value of ¥3,796 per share for YONEX. Compared to its current share price, this suggests the stock is trading at a 7.7% discount to its estimated fair value. This indicates it is very close to being fairly valued, with only a small margin of implied undervaluation.

Result: ABOUT RIGHT

YONEX is fairly valued according to our Discounted Cash Flow (DCF), but this can change at a moment's notice. Track the value in your watchlist or portfolio and be alerted on when to act.

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

Approach 2: YONEX Price vs Earnings (PE Ratio)

The Price-to-Earnings (PE) ratio is often the go-to valuation metric for profitable companies because it directly relates the price of a stock to the underlying earnings generated by the business. A higher PE ratio can signal the market's confidence in a company’s growth prospects, while a lower one may point to lower expectations or higher perceived risk.

What counts as a “normal” PE ratio depends on several factors. Companies expected to grow quickly, operate with higher margins, or face fewer risks typically command higher multiples. Slower growth or more mature businesses warrant a lower PE.

YONEX currently trades at a PE ratio of 26x. For context, the leisure industry average sits at 13.3x, and the company’s peer group averages 12.7x. This shows that investors are placing a premium on YONEX relative to both peers and the broader industry.

However, relying solely on these comparisons misses some subtleties. Simply Wall St’s proprietary “Fair Ratio” addresses this by estimating the right multiple for YONEX, factoring in its specific earnings growth, profit margins, industry, size, and risks. For YONEX, the Fair Ratio has been calculated at 18.3x. This makes it a more personalized benchmark than a flat industry or peer average.

Comparing the actual PE of 26x to the Fair Ratio of 18.3x suggests the current market price builds in high expectations for growth and sustained performance. Since the gap is more than 0.10, this indicates the stock is trading above its fair value based on fundamentals.

Result: OVERVALUED

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1438 companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your YONEX Narrative

Earlier we mentioned there's an even better way to understand valuation, so let's introduce you to Narratives. A Narrative is simply your story about a company, combining your expectations for its future, such as revenue growth, profit margins, or changing industry dynamics, with a financial forecast that leads to your own fair value estimate. Narratives connect the bigger picture of YONEX’s strategy and brand power with numbers and price, letting you see how your perspective stacks up against others in the market.

Narratives are a core, easy-to-use feature on Simply Wall St’s Community page, where millions of investors can build, share, or browse real stories behind valuations. By comparing your Fair Value to the current share price, Narratives empower you to decide when a stock looks attractive to buy or worth considering a sale, all within a clear and dynamic framework.

What’s more, Narratives automatically update as new information emerges, so your view adapts as the facts change. For instance, some investors see YONEX as worth double today’s price, betting on faster growth, while others take a cautious approach and calculate a much lower value. Narratives let you chart your own path, grounded in your reasoning and refreshed with the latest data.

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