Is There Still Opportunity in Life Stock After 49.6% YTD Surge in 2025?

When it comes to making smart decisions about your investments, timing and insight often go hand in hand. Maybe you’ve been watching Life stock climb and wondering if now is the moment to buy in, take profits, or simply hold tight. The past few years have been anything but boring for Life shareholders. Not only has the stock soared by 108.1% over three years, but just in the past year, it has posted a solid 46.8% gain. Even short-term momentum has been impressive, with 3.2% returns over the last week and a 4.4% lift in the past month. Year to date, the return stands at a striking 49.6%.

It is not just investor sentiment moving the needle, either. Recent market trends have highlighted sectors in which Life operates as sources of resilient growth, fueling a sense that the company’s fundamentals are backed by more than just hype.

The real question, though, is whether the stock is actually undervalued or if you are paying top dollar for growth that has already been priced in. Digging into the numbers, Life checks five out of six boxes for undervaluation, earning a value score of 5 and suggesting there is something interesting here beyond the headlines. Before jumping in, let’s walk through the major valuation approaches, and then I’ll share one perspective that may change the way you look at Life’s value altogether.

Life delivered 46.8% returns over the last year. See how this stacks up to the rest of the Consumer Retailing industry.

Approach 1: Life Discounted Cash Flow (DCF) Analysis

The Discounted Cash Flow (DCF) model estimates a company’s intrinsic value by projecting its future cash flows and discounting them back to what they are worth today. This approach helps investors judge whether a stock is priced attractively relative to its true worth.

For Life, the DCF model used is the 2 Stage Free Cash Flow to Equity method. The company is currently generating Free Cash Flow (FCF) of ¥1.22 billion. According to analyst estimates, the FCF is forecasted to ramp up rapidly, reaching ¥16.73 billion in 2028. Beyond that, projections extrapolated by Simply Wall St suggest this strong growth continues, with FCF expected to surpass ¥19.7 billion by 2035.

These numbers reveal robust long-term potential and form the basis for the calculated intrinsic value. The resulting DCF fair value for Life is ¥4,753 per share, which is 46% above the current trading price and indicates a significant margin of safety for new investors.

Result: UNDERVALUED

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

Our Discounted Cash Flow (DCF) analysis suggests Life is undervalued by 46.0%. Track this in your watchlist or portfolio, or discover more undervalued stocks.

Approach 2: Life Price vs Earnings (PE)

For profitable companies like Life, the Price-to-Earnings (PE) ratio is a classic and widely trusted way to judge valuation. This metric tells investors how much they are paying for each yen of a company’s earnings and is especially relevant for mature businesses with consistent profits.

What is a fair PE ratio? This depends on market expectations for future growth and risk. Higher-growth companies usually trade at higher PE multiples, whereas businesses with greater risk or slower earnings growth are typically assigned a lower multiple. Comparing against industry averages can provide context, but may miss company-specific strengths or vulnerabilities.

Currently, Life trades at a PE ratio of 11.9x. For reference, the Consumer Retailing industry average stands at 13.9x, while the average for Life’s direct peers is noticeably higher at 39.6x. Rather than simply stacking these numbers, we can look to Simply Wall St’s “Fair Ratio,” a proprietary calculation that considers not just industry and size but also earnings growth, profit margins, and risk factors. For Life, this Fair Ratio works out to 17.3x and incorporates a more nuanced view of what investors should reasonably pay relative to fundamentals.

Since Life's actual PE (11.9x) is meaningfully lower than its Fair Ratio (17.3x), the shares appear undervalued on this key metric as well.

Result: UNDERVALUED

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 Life 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 simple, approachable way to give your investment a story, where your view on a company’s future (like your own estimates of revenue, earnings, and margins) connects directly to what you think the stock is really worth.

On Simply Wall St’s Community page, millions of investors use Narratives as an accessible tool to turn their personal perspective into a live financial forecast and a fair value. Narratives help you make more informed decisions by showing exactly how your view stacks up against the current price, making it easier to decide when to buy or sell.

Best of all, Narratives update automatically whenever fresh information, such as company earnings or major news, comes in. This keeps your investment story relevant and timely. For example, one investor might believe Life is worth ¥6,000 per share by projecting faster profit growth, while another sets fair value closer to ¥3,800 by taking a more cautious approach.

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