Izumi (TSE:8273) Valuation in Focus Following Updated Earnings Guidance for Fiscal 2026

Izumi (TSE:8273) has just released new earnings guidance for the fiscal year ending February 28, 2026. The company shared detailed projections on revenue, profit, and earnings per share. This update clarifies management’s outlook to investors.

See our latest analysis for Izumi.

Izumi’s new earnings guidance comes as the share price has faced some pressure, dropping 11.5% over the past month and closing at ¥2,952.50 most recently. Looking at the longer arc, the one-year total shareholder return is down 5.6%. Over three years, investors still saw a modest gain of 5.6%. This hints that while recent momentum is subdued, investors remain attentive to how the refreshed forecasts play into the company’s next phase.

If Izumi’s cautious outlook has you curious what other opportunities might be out there, now’s a great time to broaden your search and discover fast growing stocks with high insider ownership

With shares currently trading at a discount to analyst targets and recent earnings guidance now public, investors may be wondering whether Izumi is an undervalued pick with room to run, or if the market has already priced in the company’s growth prospects.

Price-to-Earnings of 17.6x: Is it justified?

Izumi trades at a price-to-earnings (P/E) ratio of 17.6x, which puts the current share price at a premium compared to sector averages and key benchmarks. This suggests the market demands a higher price for each yen of Izumi's earnings versus peers.

The P/E ratio measures how much investors are willing to pay now for a company’s future earnings. For a retail operator like Izumi, this multiple reflects market expectations for ongoing profit generation, as well as the perceived stability or volatility of those earnings.

While the P/E of 17.6x is higher than the peer average of 15.9x and also above the multiline retail industry average of 17.2x, analysis indicates Izumi is actually good value compared to its fair P/E, estimated at 18.2x. This signals that if the market adapts toward this benchmark, there could be upward valuation movement ahead.

Explore the SWS fair ratio for Izumi

Result: Price-to-Earnings of 17.6x (OVERVALUED)

However, slower revenue growth or an earnings miss could dampen the upside potential for Izumi in the near term, despite current value signals.

Find out about the key risks to this Izumi narrative.

Another View: Discounted Cash Flow Model

Looking through another lens, the SWS DCF model estimates Izumi's fair value at ¥6,370.9, which is significantly higher than its current share price of ¥2,952.5. This suggests Izumi could be deeply undervalued based on projected cash flows, even when traditional multiples indicate otherwise. Could the market be overlooking something big?

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 Izumi 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 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 Izumi Narrative

If you feel differently or want to dig deeper into the numbers, you can easily build your own perspective on Izumi in just a few minutes, and Do it your way.

A great starting point for your Izumi research is our analysis highlighting 4 key rewards and 2 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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