Kokusai Electric (TSE:6525) Valuation Perspectives Following Earnings Forecast Revision and Equipment Sales Delay

Kokusai Electric (TSE:6525) has just lowered its full-year earnings forecast for the period ending March 2026. The company cites delays in sales of certain NAND and DRAM equipment as the reason behind this downward revision.

See our latest analysis for Kokusai Electric.

Despite Kokusai Electric’s downward revision to its full-year outlook, the company’s momentum over the past year has been remarkable, with a 1-year total shareholder return of 94.45%. While the past month saw a 12.43% decline in share price, likely reflecting the recent guidance cut, investors have enjoyed a year-to-date share price return of over 94%, suggesting strong growth expectations remain in play. Recent board decisions also affirmed the company’s dividend stability, even as near-term equipment sales are deferred.

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The question now facing investors is whether Kokusai Electric’s sharp pullback presents a genuine value opportunity or if the market is already factoring in the company’s future growth potential.

Most Popular Narrative: 11.2% Undervalued

With Kokusai Electric’s narrative fair value sitting above the recent ¥4,221 close, the numbers suggest room for further upside if consensus assumptions hold. Analysts point to profitability improvements as a core ingredient in their more optimistic stance on value.

A shift in product mix toward higher-margin, advanced nodes (e.g., mini-batch ALD for NAND, single wafer systems, GAA logic) and continued operational efficiency efforts (automation, cost optimization) are lifting gross margins and should drive operating profit growth at a rate surpassing revenue.

Read the complete narrative.

What’s fueling this higher valuation? Think rapidly rising profits, margin boosts, and some very aggressive future assumptions about product mix and efficiency. The real drivers might surprise you. See which numbers are shaping this bold fair value target.

Result: Fair Value of ¥4,751.82 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, heavy reliance on demand from China and potential execution risks around capital spending could quickly undermine the current bullish outlook.

Find out about the key risks to this Kokusai Electric narrative.

Build Your Own Kokusai Electric Narrative

If you want to dig into the numbers yourself or think there’s another story behind Kokusai Electric’s outlook, you can easily put together your own perspective in just a few minutes. Do it your way

A great starting point for your Kokusai Electric research is our analysis highlighting 2 key rewards and 1 important warning sign 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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