Is There Still Room to Run for YONEX After Recent Price Dip in 2025?

If you are considering what to do with YONEX stock, you are not alone; there has been plenty to talk about lately. After a strong multi-year run, with shares up an incredible 514.1% over the past five years, things have taken a bit of a breather. Over just the past month, the stock is down 14.9%, and it has lost 9.1% in the last week alone. Some investors are seeing this as an overdue pause after a significant bull run, while others are questioning whether the company’s growth story has hit a bump. Still, since the start of the year, YONEX is up 71.3%. This suggests the long-term trajectory remains positive, and a 90.0% gain in the last year is no small feat.

Much of the recent volatility appears to be linked to broader market sentiment and shifting risk appetites, especially as investors weigh global developments. Nothing company-specific has sharply turned the tide, so there is plenty of buzz about whether the current pullback just might be an opportunity or a warning.

Now, turning to valuation, YONEX currently scores a 1 out of 6 on key undervaluation checks. This figure cuts through market noise, but is it the best way to judge value? Let’s look at what goes into this score, compare common approaches to valuation, and by the end, explore how you can gain an even deeper understanding of what YONEX is really worth.

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 evaluates a business by forecasting its future cash flows and then discounting those values back to today, providing a single estimate for what the business is worth right now. This approach aims to cut through short-term noise by focusing on long-term financial potential.

For YONEX, the most recent Free Cash Flow (FCF) stands at approximately ¥6,482 Million, showing the company's ability to generate real cash from its operations today. Analysts forecast steady growth, predicting FCF to rise to around ¥13,788 Million by 2030. While analyst estimates are provided for the next five years, projections beyond that come from Simply Wall St's own extrapolation models. These models indicate continued, if moderating, growth into the next decade.

The result of this two-stage DCF analysis places YONEX’s intrinsic value at roughly ¥3,575 per share. This is just 2.2% above the current share price, suggesting the stock is trading very close to its calculated fair value based on long-term cash flow prospects. Investors weighing this metric can be confident the current market price aligns closely with these fundamentals.

Result: ABOUT RIGHT

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

Simply Wall St performs a valuation analysis on every stock in the world every day (check out YONEX'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: YONEX Price vs Earnings (PE Ratio)

The Price-to-Earnings (PE) ratio is a widely used valuation metric for profitable companies like YONEX because it directly relates a company's share price to its net earnings. This makes it especially relevant for investors assessing how much they are paying for each unit of earnings, which is a critical signal when a company is generating robust profits.

Generally, a “normal” or “fair” PE ratio depends on several factors, including expected future earnings growth and perceived risks. Companies with higher growth expectations or lower risk profiles often have higher PE ratios, while those facing uncertainty tend to trade at a discount.

YONEX currently trades at a PE ratio of 26x. That is lower than the peer average of 29x but significantly above the broader Leisure industry average of 15x. To provide more clarity, Simply Wall St has calculated a proprietary “Fair Ratio” for YONEX, which is 17.8x in this case. This calculation considers not just typical benchmarks but also the company’s growth outlook, profit margins, size, and risk profile.

The Fair Ratio offers a more holistic valuation benchmark than peer or industry averages alone because it integrates specific factors relevant to YONEX, such as its unique earnings potential and risk. When YONEX’s current PE ratio is compared to its Fair Ratio, the company’s shares appear to be trading at a premium, suggesting a valuation that is a bit high relative to its underlying fundamentals.

Result: OVERVALUED

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 YONEX Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let’s introduce you to Narratives. A Narrative is a powerful tool that helps you connect your story or perspective about YONEX, such as your beliefs about its future revenue growth, profit margins, and fair value, to a tailored financial forecast and valuation outcome. Narratives go beyond the numbers, blending your expectations with current data to form a clear investment thesis and fair value calculation.

Available right now on Simply Wall St’s Community page, Narratives are used by millions of investors to express their views and track them over time. This accessible approach lets you compare your Narrative’s Fair Value against YONEX’s current market price, making it easier to decide when to buy or sell. Because Narratives update automatically whenever news or company results are released, your analysis stays relevant and up-to-date.

For example, one Narrative might predict a bright future for YONEX with a high fair value, while another might take a more cautious view and suggest a lower valuation. This highlights just how diverse investor outlooks can be for the very same company.

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