MIRAI (TSE:3476) TTM Margin Expansion Reinforces Bullish Profitability Narrative

MIRAI (TSE:3476) has just posted its FY 2025 second half numbers, with revenue of ¥5,977 million and net income of ¥2,474 million, while basic EPS came in at ¥1,297. The company has seen revenue move from ¥6,201 million in FY 2024 second half to ¥5,977 million in FY 2025 second half, with basic EPS shifting from ¥1,257 to ¥1,297 over the same periods, and trailing twelve month revenue sitting at about ¥12.0 billion alongside EPS of roughly ¥2,646. With net profit margins stepping up to 42%, the latest results frame a story in which resilient earnings and firmer profitability are front and center for investors.

See our full analysis for MIRAI.

With the headline numbers on the table, the next step is to see how this earnings story lines up with the big narratives around MIRAI and where the data might push investors to rethink their assumptions.

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TTM earnings up 8.7% with 42% margin

• Over the last 12 months, net income rose 8.7% to ¥5,046 million on about ¥12.0 billion of revenue, lifting net margin to 42% from 38.4% a year earlier.
• What is interesting for a bullish angle is how this recent 8.7% earnings growth compares with the slower 1.7% per year pace over the past five years.
  • Supporters can point to the stronger trailing 12 month margin of 42% versus 38.4% previously as evidence that profitability has recently been firmer than its longer term trend.
  • At the same time, the modest 3.59% forward earnings growth forecast shows that this improved margin profile is not yet matched by a high growth outlook, which keeps expectations measured even for optimists.

8% revenue growth vs 3.6% profit growth

• Revenue is projected to rise about 8% per year versus 4.6% for the broader JP market, while earnings are only expected to grow around 3.59% annually.
• Critics focusing on a more bearish view highlight this gap between healthy top line growth and slower profit expansion.
  • The 8% revenue growth forecast outpacing the market suggests MIRAI is expected to grow its rent and fee base faster than many peers in Japan.
  • However, with earnings growth guided below the JP market’s 8.5% forecast, bears argue that future cost pressures or financing terms could keep profit growth more muted than the revenue line implies.

P/E at 18.9x, far above DCF value

• The units trade on a 18.9x forward P E, slightly below REIT peers at 19x to 19.8x, yet the current ¥49,900 price sits well above the DCF fair value of roughly ¥13,872.75.
• What stands out for valuation focused investors is the tension between relative and absolute signals.
  • On one hand, trading a bit cheaper than the JP REITs average on P E suggests the market is not paying a sector premium despite the 42% trailing margin and 8.7% earnings growth.
  • On the other hand, the large gap between the ¥49,900 market price and the ¥13,872.75 DCF fair value, together with a high debt load, gives bears a concrete numerical basis for arguing that the units could be richly priced on some absolute metrics.

📊 Read the full MIRAI Consensus Narrative.

Next Steps

Don't just look at this quarter; the real story is in the long-term trend. We've done an in-depth analysis on MIRAI's growth and its valuation to see if today's price is a bargain. Add the company to your watchlist or portfolio now so you don't miss the next big move.

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MIRAI’s modest earnings growth, particularly when compared with its robust revenue outlook, and a market price far above DCF estimates suggest a stretched valuation with limited upside.

If that disconnect makes you cautious, use our these 909 undervalued stocks based on cash flows today to quickly focus on companies where price, fundamentals, and future growth prospects line up more convincingly.

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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