Organo (TSE:6368) Looks Fully Valued Following Mixed First Quarter Earnings

Organo’s mixed first quarter draws investor focus

Organo (TSE:6368) has attracted fresh attention after reporting first quarter results to June 30, 2026, with sales of ¥42,183 million, net income of ¥3,436 million, and basic earnings per share of ¥74.73.

See our latest analysis for Organo.

The first quarter update appears to have sharpened focus on Organo’s recent price swings. A 1 day share price return of 2.14% and a 1 year total shareholder return of 25.23% point to momentum that has cooled over the past 90 days, when the share price declined 14.02%, but remains very strong over multi year periods.

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Organo’s share price has cooled over the past quarter, and analyst targets and intrinsic value estimates still sit well above or slightly below today’s ¥14,785 level. So where does fair value really lie in that spread?

Price-to-earnings of 24.1x for Organo, is it justified?

On the latest figures, Organo trades on a P/E of 24.1x, and the SWS fair P/E for the company sits slightly lower at 22.5x, which points to a richer valuation than peers.

The P/E ratio compares the company’s share price to its earnings per share. For a business like Organo that is profitable and focused on water treatment engineering, this multiple captures what investors are currently willing to pay for each unit of earnings.

Organo’s P/E of 24.1x is above the peer average of 22.6x and well above the wider JP Machinery industry average of 13.5x. The fair P/E estimate of 22.5x is lower than where the stock trades today, which suggests the market is pricing in stronger conditions than those implied by the SWS fair ratio that earnings could eventually gravitate toward.

Explore the SWS fair ratio for Organo

Result: Price-to-earnings of 24.1x (OVERVALUED)

However, Organo’s premium P/E and the recent 14.02% share price decline over 90 days leave the narrative sensitive to earnings surprises and shifts in sector sentiment.

Find out about the key risks to this Organo narrative.

Another view on Organo’s valuation

Alongside the P/E check, the SWS DCF model prices Organo’s future cash flows at ¥13,760.29 per share. With the stock at ¥14,785, that points to a modest premium. If earnings forecasts do not fully play out, how much room is there for disappointment?

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 Organo 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 24 high quality undervalued stocks. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Next Steps

Mixed signals on Organo can feel confusing, so use the data to move quickly and form your own view on the balance of risks and rewards. To see where others are drawing the line between caution and opportunity, take a look at the 2 key rewards and 1 important warning sign.

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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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