ROHM (TSE:6963) Pushes SiC And New Resistors As Undervalued Case Faces Questions

ROHM (TSE:6963) just introduced its SDR01 Series of high anti-surge chip resistors in the compact 0402 size, a product launch aimed at dense automotive, industrial, consumer, and AI server hardware designs.

ROHM’s latest resistor launch lands after a sharp pullback in the share price, which declined 15.37% over the past week and 12.47% over the past 90 days. Even so, the year-to-date share price return of 94.82% and 1-year total shareholder return of 117.93% still point to strong underlying momentum.

Scan beyond ROHM and spot other component makers exposed to high-density AI hardware and power electronics in our hand-picked 89 AI infrastructure stocks.

ROHM now trades well below analyst targets after a sharp pullback, even as recent product news stays positive. Is this a reasonable discount, or is the market leaning too hard on caution as the valuation section shows?

Most Popular Narrative: 23% Undervalued

ROHM closed at ¥4,437, while the most followed narrative implies a fair value of about ¥5,764. The story centres on whether the gap can be bridged by its power device push and cost measures.

ROHM is planning to increase its production capacity and efficiency for SiC (silicon carbide) power devices, correlating with expected battery EV market growth, which should enhance revenue and earnings as demand eventually picks up. The company is implementing a new organizational structure to better cater to customer needs and market applications, which aims to improve sales and potentially increase net margins by offering more integrated, solution-based proposals.

See why 3 investors see ROHM as 23% undervalued.

Result: Fair Value of ¥5,764 (UNDERVALUED)

Still, the risk is clear if industrial and automotive demand keeps sliding and if ROHM’s cost cuts and SiC investments take longer to translate into stronger profitability.

Find out about the key risks to this ROHM narrative.

Another View On ROHM’s Valuation

Analyst narratives frame ROHM as undervalued versus a fair value near ¥5,764. However, the SWS DCF model paints a very different picture. On that cash flow lens, TSE:6963 screens as expensive, with the current ¥4,437 price sitting well above an estimated future cash flow value of ¥1,485.01. Which story do you trust more: price targets or cash flows?

Our Look into how the SWS DCF model arrives at its fair value.

Next Steps

Mixed messages around ROHM's value can be confusing. Move quickly, review the underlying data, and weigh both sides of the story using 1 key reward 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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