Genky DrugStores (TSE:9267): Assessing Valuation as Sales Growth Trends Moderate in October 2025

Genky DrugStores (TSE:9267) just shared its October 2025 sales results, highlighting growth in both all store and existing store net sales. However, the pace of growth slowed compared to October last year. Investors are tuning in to see what that trend means.

See our latest analysis for Genky DrugStores.

Genky DrugStores’ announcement comes on the heels of strong share price momentum. This year, the stock has delivered an impressive 67.74% year-to-date share price return, with total shareholder return over the past three years reaching 184.62%. Despite the recent moderation in sales growth, market confidence appears robust both in the short and long run.

If you’re watching for stocks building up fresh momentum, now’s the perfect time to widen your search and discover fast growing stocks with high insider ownership

With such strong prior returns and steady fundamentals, the question is whether Genky DrugStores is still trading at an attractive valuation, or if the market has already priced in most of its future growth potential.

Price-to-Earnings of 21x: Is it justified?

Genky DrugStores is currently trading at a price-to-earnings (P/E) ratio of 21x, which is far higher than the industry average. At its last close of ¥5,200, these valuation levels indicate the stock is considered richly priced compared to its sector peers.

The P/E ratio measures how much investors are willing to pay for each yen of a company’s earnings. For Genky DrugStores, this key multiple helps investors assess whether strong growth and quality earnings merit a premium price tag in the consumer retailing segment.

Despite strong growth metrics and high-quality earnings, a P/E of 21x places Genky’s shares well above the JP Consumer Retailing industry average of 12.9x. The figure is also higher than the estimated Fair P/E Ratio of 16.7x, which suggests the market may be pricing in ambitious future growth or demonstrating strong confidence in management’s execution. If sentiment shifts or growth expectations cool, there is room for the market multiple to adjust closer to the fair level.

Explore the SWS fair ratio for Genky DrugStores

Result: Price-to-Earnings of 21x (OVERVALUED)

However, slower annual revenue and net income growth could limit upside if Genky DrugStores fails to outpace sector trends or meet high expectations.

Find out about the key risks to this Genky DrugStores narrative.

Another View: The DCF Model Challenges the Market Price

Looking at Genky DrugStores through the lens of our DCF model paints a different picture. The SWS DCF model estimates fair value at just ¥327.38, which is far below the current share price of ¥5,200. This suggests Genky DrugStores could be significantly overvalued according to discounted cash flow analysis. Does the disconnect highlight an overlooked risk, or is the market betting on growth DCF cannot see?

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 Genky DrugStores 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 874 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 Genky DrugStores Narrative

If you have a different perspective or want to dig into the numbers on your own terms, you can build a personalized view in just a few minutes. Do it your way

A great starting point for your Genky DrugStores research is our analysis highlighting 2 key rewards and 2 important warning signs that could impact your investment decision.

Looking for more investment ideas?

Smart investors always stay one step ahead by tapping into new trends and special opportunities. Don’t let valuable prospects pass you by. Take action now using these ideas:

• Boost your income by targeting cash-generating companies with juicy yields using these 16 dividend stocks with yields > 3%.
• Seize rapid growth with cutting-edge leaders driving breakthroughs in the world of artificial intelligence. Start with these 24 AI penny stocks.
• Take advantage of market mispricings and spot potential bargains with these 874 undervalued stocks based on cash flows based on proven cash flow fundamentals.

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