TDK (TSE:6762): Assessing Valuation After a Strong Multi‑Year Share Price Run

Recent performance and why TDK is on investors’ radar

TDK (TSE:6762) has quietly outpaced the broader Japanese tech space over the past year, and that steady climb is what makes the stock worth a closer look right now.

See our latest analysis for TDK.

Despite a softer patch lately, with a recent pullback tempering its 90 day share price return of 19.68 percent, TDK still has a 22.11 percent one year total shareholder return. This suggests the longer term momentum remains firmly positive.

If TDK’s steady climb has your attention, it might be a good moment to see what else is working in tech and electronics via high growth tech and AI stocks.

But with the shares still trading close to analyst targets after a strong multi year run, is TDK now a fairly valued quality compounder, or does the current price still leave room for upside if growth surprises?

Most Popular Narrative: 3.6% Undervalued

With TDK last closing at ¥2,433 against a narrative fair value of about ¥2,523, the story leans toward mild upside driven by improving fundamentals.

The company's focus on enhancing capabilities in quality, productivity, and technology, along with strategic investments in AI, can lead to improvements in net margins by increasing operational efficiency and driving technological advancements. TDK's strategic management of its business portfolio, including exiting non profitable segments and concentrating on high growth areas like AI, is likely to improve earnings by reallocating resources to more profitable ventures.

Read the complete narrative.

Want to see how steady revenue growth, rising margins, and a richer future earnings multiple all fit together? The full narrative unpacks the exact roadmap behind that fair value and the bold assumptions it makes about where TDK’s profitability could be a few years from now.

Result: Fair Value of ¥2,523.24 (UNDERVALUED)

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

However, slowing demand in automotive components and potential U.S. trade tariffs could pinch TDK’s revenue growth and challenge the upbeat margin and valuation narrative.

Find out about the key risks to this TDK narrative.

Another View: Multiples Flash a Caution Signal

While the fair value narrative and analyst targets point to modest upside, our ratio work paints a tougher picture. TDK trades on a 26.7x earnings multiple versus a 24.5x fair ratio and just 14.6x for the wider Japanese electronics group, implying valuation risk if growth stumbles.

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own TDK Narrative

If this perspective does not quite match your own, or you would rather review the numbers yourself, you can build a custom view in minutes: Do it your way.

A great starting point for your TDK research is our analysis highlighting 1 key reward 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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