A Look at Fuji Oil Holdings (TSE:2607) Valuation Following Strong Earnings and 19% Net Sales Growth

Fuji Oil (TSE:2607) released its earnings for the six months ending September 2025, revealing net sales up 19% year-on-year along with meaningful profit growth. This financial update caught the attention of market participants.

See our latest analysis for Fuji Oil.

Following the surge in earnings, Fuji Oil's shares rallied strongly with a 5.7% gain in a single day and an impressive 8.6% share price return over the past week, signaling a notable shift in sentiment. While the year-to-date move has been modest, the latest momentum adds to a solid 6.7% total shareholder return over the past twelve months. This underscores investors’ renewed optimism for the company’s longer-term outlook.

If Fuji Oil’s bounce grabbed your attention, this could be the perfect moment to broaden your sights and discover fast growing stocks with high insider ownership

With earnings accelerating and shares rebounding, the key question now is whether Fuji Oil is trading at a value the market has overlooked or if expectations of future growth are already fully factored into the price.

Price-to-Sales Ratio of 0.4x: Is it justified?

Fuji Oil's shares are trading at a price-to-sales ratio of 0.4x, signaling attractive value compared to both its industry and peers at recent prices around ¥3,447. This relatively low multiple raises questions about whether the market is underestimating the company’s underlying revenue power in this sector.

The price-to-sales ratio measures how much investors are willing to pay for each unit of the company’s revenue and is especially relevant for food sector firms where steady sales outweigh transient earnings swings. A lower ratio suggests the market may not be expecting robust improvement or may see risks to sustaining sales performance.

For Fuji Oil, the current price-to-sales ratio not only looks inexpensive compared to the JP Food industry average of 0.6x, but also stacks up favorably versus peer companies’ average of 0.8x. According to our analysis, the fair price-to-sales ratio for Fuji Oil is closer to 0.5x, underscoring the potential for a market adjustment if the company’s fundamentals continue to firm up.

Explore the SWS fair ratio for Fuji Oil

Result: Price-to-Sales Ratio of 0.4x (UNDERVALUED)

However, lingering industry competition and unexpected shifts in consumer demand could still challenge Fuji Oil’s momentum in the months ahead.

Find out about the key risks to this Fuji Oil narrative.

Another View: What Does the SWS DCF Model Say?

Taking a different approach, the SWS DCF model puts Fuji Oil’s fair value at ¥7,389.43 per share. This figure is over 50% higher than its current trading price, suggesting an even greater margin of undervaluation than the price-to-sales ratio implies. Could the market be missing something significant, or is there a reason for caution?

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 Fuji Oil 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 857 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 Fuji Oil Narrative

If you want to take a different view or dig deeper into the numbers, you can craft your own take on Fuji Oil’s story in just a few minutes. Do it your way.

A great starting point for your Fuji Oil research is our analysis highlighting 3 key rewards and 3 important warning signs that could impact your investment decision.

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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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