3 Japanese Stocks Possibly Undervalued On The Exchange

Japan's stock markets have recently experienced declines, with the Nikkei 225 Index and TOPIX Index both falling, amid easing domestic inflation and speculation about the Bank of Japan's interest rate policies. Despite these broader market challenges, some stocks may be considered undervalued, offering potential opportunities for investors who are looking for companies with strong fundamentals that might not yet be fully reflected in their current share prices.

Top 10 Undervalued Stocks Based On Cash Flows In Japan

Name	Current Price	Fair Value (Est)	Discount (Est)
Hagiwara Electric Holdings (TSE:7467)	¥3440.00	¥6689.11	48.6%
Eternal Hospitality GroupLtd (TSE:3193)	¥3950.00	¥7626.46	48.2%
Pilot (TSE:7846)	¥4704.00	¥8914.38	47.2%
Appier Group (TSE:4180)	¥1748.00	¥3463.33	49.5%
Management SolutionsLtd (TSE:7033)	¥1995.00	¥3841.80	48.1%
Medley (TSE:4480)	¥4115.00	¥7954.76	48.3%
Adventure (TSE:6030)	¥3905.00	¥7330.51	46.7%
S-Pool (TSE:2471)	¥362.00	¥689.78	47.5%
Gift Holdings (TSE:9279)	¥3285.00	¥6537.40	49.8%
KeePer Technical Laboratory (TSE:6036)	¥4190.00	¥7828.96	46.5%

Click here to see the full list of 85 stocks from our Undervalued Japanese Stocks Based On Cash Flows screener.

Let's review some notable picks from our screened stocks.

TORIDOLL Holdings (TSE:3397)

Overview: TORIDOLL Holdings Corporation operates and manages restaurants in Japan and internationally, with a market cap of ¥344.38 billion.

Operations: The company's revenue segments include Marugame Seimen generating ¥118.26 billion, Overseas Business contributing ¥97.12 billion, and Domestic Others with ¥29.77 billion.

Estimated Discount To Fair Value: 40.9%

TORIDOLL Holdings appears undervalued based on cash flows, trading over 20% below its estimated fair value of ¥6,663.25. The company forecasts robust earnings growth of 38.1% annually, outpacing the Japanese market average of 8.7%. Recent guidance for fiscal year ending March 2025 projects revenue at ¥265 billion and profit attributable to owners at ¥6.46 billion, underscoring strong financial performance despite lower forecasted return on equity at 11%.

• According our earnings growth report, there's an indication that TORIDOLL Holdings might be ready to expand.
• Navigate through the intricacies of TORIDOLL Holdings with our comprehensive financial health report here.

AEON FantasyLTD (TSE:4343)

Overview: AEON Fantasy Co., LTD. operates amusement facilities in Japan and has a market cap of ¥44 billion.

Operations: Revenue segments for TSE:4343 are not provided in the text.

Estimated Discount To Fair Value: 34.3%

AEON Fantasy LTD trades at ¥2,225, significantly below its estimated fair value of ¥3,386.43. Despite a high debt level and slower revenue growth forecast (3% annually) compared to the Japanese market (4.2%), its earnings are projected to grow substantially at 27.6% per year, surpassing the market average of 8.7%. The company recently became profitable and is expected to maintain high-quality earnings despite large one-off items affecting results.

• The analysis detailed in our AEON FantasyLTD growth report hints at robust future financial performance.
• Delve into the full analysis health report here for a deeper understanding of AEON FantasyLTD.

Medley (TSE:4480)

Overview: Medley, Inc. operates recruitment and medical business platforms in Japan and the United States, with a market cap of ¥133.68 billion.

Operations: The company's revenue segments include the Human Resource Platform Business at ¥17.87 billion, the Medical Platform Business at ¥6.09 billion, and New Services generating ¥573 million.

Estimated Discount To Fair Value: 48.3%

Medley, Inc. is trading at ¥4,115, considerably below its estimated fair value of ¥7,954.76. Despite recent share price volatility and a board meeting considering strategic acquisitions, Medley's earnings are projected to grow significantly at 30.36% annually over the next three years—outpacing the Japanese market average of 8.7%. Furthermore, revenue growth is expected to be robust at 25% per year, supported by business expansions like Jobley's U.S. rollout in healthcare recruitment services.

• Upon reviewing our latest growth report, Medley's projected financial performance appears quite optimistic.
• Click to explore a detailed breakdown of our findings in Medley's balance sheet health report.

Where To Now?

• Click here to access our complete index of 85 Undervalued Japanese Stocks Based On Cash Flows.
• Have a stake in these businesses? Integrate your holdings into Simply Wall St's portfolio for notifications and detailed stock reports.
• Join a community of smart investors by using Simply Wall St. It's free and delivers expert-level analysis on worldwide markets.

Ready To Venture Into Other Investment Styles?

• Explore high-performing small cap companies that haven't yet garnered significant analyst attention.
• Diversify your portfolio with solid dividend payers offering reliable income streams to weather potential market turbulence.
• Fuel your portfolio with companies showing strong growth potential, backed by optimistic outlooks both from analysts and management.

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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