Assessing Kamigumi (TSE:9364) Valuation After Strong Revenue Growth, Higher Profits, and Dividend Increase

Kamigumi (TSE:9364) reported significant growth in operating revenues and profits for the six months ending September 2025, accompanied by an increased dividend and a positive outlook for future earnings. Strategic initiatives appear to be driving market and operational gains for the company.

See our latest analysis for Kamigumi.

Kamigumi’s strong revenue growth and upbeat profit guidance have fueled a notable rally in its shares, with a year-to-date share price return of almost 44% and a 1-year total shareholder return nearing 52%. Momentum appears solid, reflecting investors’ optimism about the company’s outlook and execution.

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But with shares posting sizable gains and current prices sitting just above analyst targets, investors have to ask if Kamigumi is now undervalued, or if the market has already priced in all that future growth potential.

Price-to-Earnings of 18.1: Is it justified?

Kamigumi currently trades at a price-to-earnings (P/E) ratio of 18.1, noticeably higher than both its peer group and regional infrastructure industry averages, despite recent share price gains.

The P/E ratio measures how much investors are willing to pay for each yen of Kamigumi’s earnings. It is a common gauge of expectations for future growth and profitability in this sector.

Kamigumi is being valued at nearly double its peers based on earnings. This signals high growth expectations or a premium attached by the market. However, the company's recent earnings growth has been modest and is not projected to outpace the industry or market. Compared to the industry’s average P/E of 13.7 and the estimated fair P/E of 13.7, Kamigumi stands out as significantly more expensive. This sets a level the market could eventually revert toward if expectations do not materialize.

Explore the SWS fair ratio for Kamigumi

Result: Price-to-Earnings of 18.1 (OVERVALUED)

However, risks remain if Kamigumi’s earnings growth slows or if broader market sentiment shifts. Either of these scenarios could trigger a revaluation of its premium pricing.

Find out about the key risks to this Kamigumi narrative.

Another View: What Does Our DCF Model Say?

Looking at Kamigumi through the lens of our SWS DCF model, the picture also points to the shares being overvalued. According to the model, Kamigumi is trading above its fair value, suggesting the market’s optimism may have already priced in much of the potential. So, what might happen if sentiment changes and expectations reset?

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 Kamigumi 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 878 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 Kamigumi Narrative

If you have your own perspective or want to explore the numbers firsthand, you can craft a personalized assessment in just a few minutes, so why not Do it your way

A good starting point is our analysis highlighting 3 key rewards investors are optimistic about regarding Kamigumi.

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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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