Assessing Anritsu (TSE:6754)’s Valuation After Its Strong Multi‑Month Share Price Rally

Anritsu (TSE:6754) has quietly delivered a strong run lately, with the share price climbing about 4% over the past month and roughly 15% in the past 3 months. That kind of steady momentum naturally raises the question of whether the market is simply catching up to fundamentals or starting to look ahead to the next wave of 5G and 6G driven demand.

See our latest analysis for Anritsu.

Zooming out, that recent strength sits on top of a much bigger move. The year to date share price return is roughly 68% and the one year total shareholder return is about 73%, suggesting momentum is clearly building as investors warm to its growth story and risk profile.

If Anritsu’s run has you thinking about what else might benefit from the next leg of digital infrastructure spending, now is a good time to scout high growth tech and AI stocks.

Yet with the share price now trading above consensus targets but still showing a healthy intrinsic discount, the real debate is whether Anritsu remains mispriced or if the market is already pricing in the next growth cycle.

Price-to-Earnings of 26.8x: Is it justified?

On a headline basis, Anritsu’s latest close at ¥2,270.5 translates into a price-to-earnings ratio of 26.8x, putting the shares on a clear valuation premium rather than a discount.

The price-to-earnings ratio compares what investors are currently willing to pay for each unit of the company’s earnings. It is a key yardstick for established, profitable tech hardware and measurement businesses. A higher multiple usually signals that the market is baking in stronger or more resilient profit growth ahead.

In Anritsu’s case, the 26.8x multiple sits well above both its estimated fair price-to-earnings ratio of 19.9x and the broader peer landscape. That suggests investors are already paying up for its recent 52% earnings rebound and the forecast 12.1% annual profit growth, even though the stock is trading at 22.3% below the SWS DCF fair value estimate of ¥2,923.79. This is a level the market could ultimately gravitate toward if those earnings expectations hold.

Against the JP Electronic industry average of 14.7x and a peer average of 18.9x, Anritsu’s 26.8x stands out as a rich premium. This implies the market is assigning it a leadership style valuation rather than a typical sector multiple.

Explore the SWS fair ratio for Anritsu

Result: Price-to-Earnings of 26.8x (OVERVALUED)

However, risks remain, including a potential slowdown in telecom capex cycles and execution challenges in turning 6G and IoT opportunities into sustained earnings.

Find out about the key risks to this Anritsu narrative.

Another View Using Our DCF Model

While the earnings multiple suggests Anritsu is expensive, our DCF model points the other way. With the share price about 22% below our fair value estimate of ¥2,923.79, it frames the stock as undervalued. Is this a margin of safety or a value trap forming?

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 Anritsu 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 902 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 Anritsu Narrative

If you see the numbers differently or would rather dig into the details yourself, you can build a custom view in just a few minutes: Do it your way.

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