i-mobile (TSE:6535) Q1: Margin Compression Challenges Bullish Earnings-Growth Narrative

i-mobileLtd (TSE:6535) has kicked off Q1 2026 with revenue of ¥10.1 billion and basic EPS of ¥0.75, setting the tone after a volatile run through fiscal 2025. The company has seen quarterly revenue move from ¥4.4 billion in Q1 2025 to ¥11.98 billion in Q2, then ¥2.25 billion and ¥2.88 billion in Q3 and Q4 respectively. Over the same periods, basic EPS swung from ¥12.49 to ¥31.87, then ¥5.95 and ¥0.91, giving investors plenty to consider as they assess how these shifts affect profit margins.

See our full analysis for i-mobileLtd.

With the headline numbers on the table, the next step is to see how this earnings profile lines up with the dominant narratives around i-mobileLtd, and where the margin story might support or challenge what the market has been assuming.

Curious how numbers become stories that shape markets? Explore Community Narratives

30.3% earnings growth but softer 8.4% margins

• Over the last 12 months, net profit margin slipped from 10.1% to 8.4% even as earnings grew 30.3% year on year.
• Bulls point to that 30.3% trailing earnings growth as proof the business is scaling. However, the move from a 10.1% to 8.4% net margin means part of that growth came with thinner profitability, so investors need to weigh whether volume driven gains can offset the squeeze on each yen of revenue.
  • The latest trailing net income of 2,279 million JPY on 27,257 million JPY of revenue underpins the growth story, but shows less profit per unit of sales than a year ago.
  • Compared with the five year average earnings growth of about 2% annually, the recent acceleration strongly supports the bullish narrative, while the margin drift challenges how durable that pace may be.

Investors who want to see how this trade off between growth and margins plays out over time should explore the deeper narrative now before the next set of numbers shifts the picture again. 📊 Read the full i-mobileLtd Consensus Narrative.

TTM EPS near 39.9 JPY after a volatile year

• Trailing twelve month basic EPS sits at 39.89 JPY, built on a choppy pattern from 31.87 JPY in Q2 2025 down to 0.75 JPY in Q1 2026, showing how lumpy quarterly contributions can still add up to solid annualized performance.
• What stands out for bullish investors is that despite low single digit EPS in the most recent quarters, the trailing figure has risen from 30.42 JPY in early 2025 to 39.89 JPY now, which heavily supports the view that the business can absorb short term swings and still grow owners share of profit.
  • Net income over the trailing period increased from 1,749 million JPY to 2,279 million JPY, reinforcing that the headline EPS growth is backed by absolute profit, not just share count effects.
  • The sharp contrast between quarterly EPS peaks like 31.87 JPY in Q2 2025 and the latest 0.75 JPY underlines why bulls focus on the rolling twelve month trend rather than reacting to any single report.

12.1x P E and 68% DCF discount

• The stock trades at a 12.1x trailing P E with a current share price of 491 JPY, compared with industry and peer averages of 20.1x and 40.9x respectively, and far below a DCF fair value of 1,546.13 JPY.
• Supporters of the bullish case argue that combining this 12.1x multiple with the 68% discount to DCF fair value offers substantial upside. Yet the same dataset shows net margin easing to 8.4%, so the low valuation may also be reflecting the market focus on profitability pressure rather than just overlooking the stock.
  • On trailing numbers, investors are paying below the sector P E while getting higher recent earnings growth than the five year average, which is a setup value focused bulls often seek out.
  • The gap between the 491 JPY share price and the 1,546.13 JPY DCF fair value estimate is wide enough that even modest execution against recent earnings trends could still leave room for re rating if the market regains confidence in margins.

Next Steps

Don't just look at this quarter; the real story is in the long-term trend. We've done an in-depth analysis on i-mobileLtd's growth and its valuation to see if today's price is a bargain. Add the company to your watchlist or portfolio now so you don't miss the next big move.

See What Else Is Out There

Despite solid year on year earnings growth, i-mobileLtd is wrestling with thinner net margins and highly volatile quarterly EPS, raising questions about durability.

If that inconsistency makes you uneasy, use our stable growth stocks screener (2103 results) to quickly focus on businesses delivering steadier earnings and revenue so your portfolio feels more predictable.

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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