MERF (TSE:3168) Stock Sees Revenue Surge But Margin Pressure Persists

MERF stock comes into this earnings recap under pressure, with the share price down about 19% over the past month even before investors could fully digest the latest figures. The headline this quarter is simple. Revenue reached ¥33,353.078m, while net income slipped to ¥512.403m and earnings per share came in at ¥36.20, below the stronger mid year run rate.

Short term traders focused on that profit squeeze. Long term holders are weighing those softer margins against a trailing P/E near 5x and a business that has only recently turned consistently profitable.

Love MERF's low trailing P/E but worried that the recent margin squeeze turns it into a value trap instead of a value opportunity? Put those results in context by comparing it with our 16 high quality undervalued stocks.

Q4 2026 Earnings Summary

• Revenue (Q4 2026 vs. Q4 2025): ¥33,353.078m vs. ¥20,471m (very large increase, more than 1.6x year on year)
• Net Income (Excl. Extra Items, Q4 2026 vs. Q4 2025): ¥512.403m vs. ¥185m (very large increase, close to 3x year on year)
• Basic EPS (Q4 2026 vs. Q4 2025): ¥36.20 vs. ¥13.09 (very large increase, close to 3x year on year)
• Trailing 12 Month Basic EPS (Q4 2026 vs. Q4 2025): ¥197.28 vs. a loss of ¥14.36 (swing into profitability over the year)

Tired of staring at dense earnings tables and raw figures trying to piece MERF's story together on your own? Get a clear, visual breakdown of MERF's valuation picture in our company report for MERF.

MERF earnings and the circular economy story

For anyone leaning bullish on MERF as a circular economy and industrial supplier story, the latest figures offer some support. Revenue for Q4 2026 and net income both moved to materially higher absolute levels than Q4 2025, and basic EPS almost tripled year on year. Trailing 12 month EPS swung from a loss to ¥197.28. For a recycling focused metals player, that shift into consistent profitability supports the view that the business model can convert scrap flows into cash, not just headline volume.

Testing MERF downside risks against fresh numbers

Bears focus on thin margins and cyclical earnings tied to metal prices. The recent share price drop of roughly 19% over 30 and 90 days reflects that concern in the market. Yet Q4 2026 net income and EPS still finished far above Q4 2025, and the trailing year moved from a loss into the black. Profitability pressure in the quarter is visible, but the direction over twelve months points to risks that appear more about volatility than outright business strain.

After a quarter where debt coverage and free cash flow already look tight, it makes sense to ask whether MERF's recent volatility is just noise or an early signal of deeper structural fragility. Review the full risk analysis for MERF which shows 3 important warning signs

Step Up Your MERF Investing Game

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Seeking Alternatives Beyond MERF?

Fresh ideas often move first when momentum starts breaking out and early data gets stale fast. Scan these under the radar lists before the crowd catches on and consider your options promptly.

• Identify income workhorses with strong payouts and balance sheets, then line them up against MERF using the curated 31 dividend fortresses.
• Track companies building the picks and shovels for AI demand and compare that backbone exposure with MERF through our focused 92 AI infrastructure stocks.
• Focus on metal producers emphasizing volume and cost efficiency and weigh that against MERF's recycling angle via the specialized 10 top silver producer stocks.

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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