3 Japanese Stocks Including TORIDOLL Holdings Possibly Trading Below Fair Value

Japan's stock markets have rebounded strongly, with the Nikkei 225 Index gaining 8.7% and the broader TOPIX Index up 7.9%, bolstered by better-than-expected U.S. economic data and a weaker yen providing support for exporters. Amid this positive sentiment, identifying undervalued stocks can offer promising opportunities for investors looking to capitalize on potential market inefficiencies. In this article, we will explore three Japanese stocks, including TORIDOLL Holdings, that may be trading below their fair value based on current market conditions and economic indicators.

Top 10 Undervalued Stocks Based On Cash Flows In Japan

Name	Current Price	Fair Value (Est)	Discount (Est)
Syuppin (TSE:3179)	¥1377.00	¥2661.94	48.3%
Micronics Japan (TSE:6871)	¥4930.00	¥9741.39	49.4%
Hottolink (TSE:3680)	¥347.00	¥661.41	47.5%
BayCurrent Consulting (TSE:6532)	¥4339.00	¥8599.02	49.5%
Ohara (TSE:5218)	¥1360.00	¥2583.28	47.4%
SHIFT (TSE:3697)	¥12305.00	¥23310.15	47.2%
Visional (TSE:4194)	¥8680.00	¥17154.27	49.4%
Fudo Tetra (TSE:1813)	¥2318.00	¥4410.99	47.4%
TORIDOLL Holdings (TSE:3397)	¥3585.00	¥7033.91	49%
SBI ARUHI (TSE:7198)	¥856.00	¥1704.43	49.8%

Click here to see the full list of 80 stocks from our Undervalued Japanese Stocks Based On Cash Flows screener.

Here's a peek at a few of the choices from the screener.

TORIDOLL Holdings (TSE:3397)

Overview: TORIDOLL Holdings Corporation, with a market cap of ¥313.04 billion, operates and manages restaurants both in Japan and internationally through its subsidiaries.

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

Estimated Discount To Fair Value: 49%

TORIDOLL Holdings is trading at ¥3,585, significantly below its estimated fair value of ¥7,033.91. The company forecasts substantial revenue and profit growth for fiscal year 2025, with expected earnings per share of ¥69.61. Despite low forecasted return on equity (11%), earnings are projected to grow by 37.55% annually over the next three years, outpacing the Japanese market's average growth rate of 8.5%. Recent earnings grew by 68.5%, indicating robust financial performance despite large one-off items impacting results.

• The growth report we've compiled suggests that TORIDOLL Holdings' future prospects could be on the up.
• Get an in-depth perspective on TORIDOLL Holdings' balance sheet by reading our health report here.

Simplex Holdings (TSE:4373)

Overview: Simplex Holdings, Inc. offers strategic consulting, design and development, and operation and maintenance services to financial institutions, corporations, and the public sector globally with a market cap of ¥139.56 billion.

Operations: The company's revenue segment includes the provision of IT solutions, generating ¥42.26 billion.

Estimated Discount To Fair Value: 37.4%

Simplex Holdings is trading at ¥2,394, well below its estimated fair value of ¥3,827.25. Despite a volatile share price recently, the company has demonstrated strong earnings growth of 26.6% annually over the past five years and is forecasted to continue growing earnings by 20.2% per year, outpacing the Japanese market's average growth rate of 8.5%. Analysts agree that Simplex Holdings' stock price could rise by 37.9%, making it potentially undervalued based on cash flows.

• Our comprehensive growth report raises the possibility that Simplex Holdings is poised for substantial financial growth.
• Unlock comprehensive insights into our analysis of Simplex Holdings stock in this financial health report.

Takara Bio (TSE:4974)

Overview: Takara Bio Inc., with a market cap of ¥129.57 billion, operates in the bioindustry, CDMO, and gene therapy sectors across Japan, China, other parts of Asia, the United States, Europe, and internationally.

Operations: The company's revenue segments include ¥42.82 billion from its Drug Discovery Company division.

Estimated Discount To Fair Value: 33.9%

Takara Bio Inc. is trading at ¥1,076, significantly below its estimated fair value of ¥1,628.62. The company's earnings are expected to grow 30.2% annually over the next three years, outpacing the Japanese market's average growth rate of 8.5%. Despite lower profit margins this year (0.3%) compared to last year (17%), Takara Bio's revenue is forecasted to grow faster than the JP market at 5.6% per year, making it potentially undervalued based on cash flows.

• In light of our recent growth report, it seems possible that Takara Bio's financial performance will exceed current levels.
• Navigate through the intricacies of Takara Bio with our comprehensive financial health report here.

Where To Now?

• Take a closer look at our Undervalued Japanese Stocks Based On Cash Flows list of 80 companies by clicking here.
• Invested in any of these stocks? Simplify your portfolio management with Simply Wall St and stay ahead with our alerts for any critical updates on your stocks.
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Looking For Alternative Opportunities?

• 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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