Rigaku Holdings (TSE:268A): Assessing Valuation After Updated Share Repurchase Progress

Rigaku Holdings (TSE:268A) just updated investors on its ongoing share repurchase program, confirming fresh November buybacks as part of a broader plan to fine tune its capital structure and support shareholder returns.

See our latest analysis for Rigaku Holdings.

The latest buybacks come as Rigaku Holdings enjoys firm momentum, with a 1 day share price return of nearly 6 percent and a 90 day share price return of about 17 percent pushing the stock to ¥1,019, even though the 1 year total shareholder return is still relatively modest.

If this kind of capital management story has your attention, it might be a good moment to see what else is out there and explore high growth tech and AI stocks.

With earnings still growing solidly and the shares trading at a discount to analyst targets and intrinsic value estimates, is Rigaku quietly undervalued here, or has the market already priced in its next leg of growth?

Price-to-Earnings of 26x: Is it justified?

Rigaku Holdings last closed at ¥1,019, and its 26x price-to-earnings multiple looks stretched against peers, pointing to an overvalued earnings profile despite recent buybacks.

The price-to-earnings ratio compares the current share price to the company’s earnings per share. It is a simple way to gauge how much investors are paying for each unit of profit. For an established scientific equipment maker like Rigaku, this multiple is a quick lens on how the market is pricing its growth prospects, margin resilience and competitive position.

In Rigaku’s case, the 26x price-to-earnings stands well above the peer average of 16.8x, and higher than the company’s own estimated fair price-to-earnings of 21.2x. This suggests the market is assigning a premium to its forecast 17.2 percent earnings growth and quality of earnings, but also implies there is room for the multiple to move closer to that fair ratio level if expectations change.

Compared with the broader Japanese electronic industry, where the average price-to-earnings sits at 14.3x, Rigaku’s 26x valuation looks markedly richer. This underscores how much more investors are currently willing to pay for its earnings stream than for the typical sector name.

Explore the SWS fair ratio for Rigaku Holdings

Result: Price-to-Earnings of 26x (OVERVALUED)

However, slowing revenue growth or a reversal in semiconductor demand could quickly challenge today’s premium multiple and weaken the buyback-supported upside story.

Find out about the key risks to this Rigaku Holdings narrative.

Another View: DCF Says the Story Is Different

While the 26x price-to-earnings ratio suggests a premium valuation, our DCF model presents a different perspective. It indicates Rigaku Holdings may be undervalued, with the shares trading about 21 percent below an estimated fair value of roughly ¥1,286. This raises the question of whether the market is underestimating the durability of its cash flows.

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 Rigaku Holdings 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 918 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 Rigaku Holdings Narrative

If you see the numbers differently or simply want to dig into the details yourself, you can build a custom narrative in just a few minutes: Do it your way.

A great starting point for your Rigaku Holdings research is our analysis highlighting 3 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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