Nomura Holdings (TSE:8604) Stock Faces A Q2 Earnings Reality Check

Nomura Holdings stock closed at ¥1,476.5, roughly flat over the past week but still down over the last three months, just as fresh Q2 2027 numbers hit the tape. At first glance, softer quarter on quarter profit and revenue figures might look like a reason to shrug. The bigger story sits in the background. Trailing earnings per share of about ¥142 and a 10.9% return on equity signal a business that is still generating solid profits, even as the share price trades well below one widely used discounted cash flow estimate.

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Q2 2027 Earnings Summary

• Revenue (Q2 2027 vs Q2 2026): ¥607,476m vs. ¥515,462m (up about 17.8%)
• Net Income (Q2 2027 vs Q2 2026): ¥103,728m vs. ¥92,078m (up about 12.7%)
• Basic EPS (Q2 2027 vs Q2 2026): ¥35.50 vs. ¥31.33 (up about 13.3%)
• Trailing Net Profit Margin (Last 12 Months vs Prior Year): 17.1% vs. 18.6% (margin compressed by about 1.5 percentage points)

Earnings tell one story, but investors who care about what they are really paying for usually study the cash coming in and out of a business. Nomura Holdings' latest figures show strong reported profits, and if you look at the cash flows behind them, the stock could be a dramatic 41% undervalued.

Nomura bullish mix shift faces early reality check

Bulls argue that Nomura Holdings can steadily rotate earnings toward fee and interest streams that are easier to predict and less trading heavy.

"Bullish analysts expect Nomura Holdings to keep shifting its earnings mix toward more stable fee and interest income as Wealth Management, Investment Management, Wholesale, Banking and cost reform programs progress against raised 2030 and FY31 targets."

Q2 shows progress but not a clean win. Wealth recurring revenue hit a record with ¥31t in recurring assets and Banking net revenue grew 7% with income before tax up 20%. At the same time, group net revenue fell 12% quarter on quarter and Wholesale profit halved, underlining that trading swings still matter for overall earnings.

Funding risk narrative still hangs over Nomura

Bears worry that Nomura’s funding model and currency exposure could blunt the benefit of all that recurring revenue work.

"Nomura Holdings still relies heavily on wholesale funding rather than a large base of customer deposits. Sharp moves in the yen or stress in funding markets could raise funding costs faster than the company can reprice assets, which would pressure net margins and limit earnings."

This quarter does not flag a funding event, and capital looks solid with a 12.6% CET1 ratio. Earnings pressure came more from softer markets, with group net revenue and income before tax both down quarter on quarter and Wholesale costs still high. The risk case remains theoretical, but it has not been retired.

One Narrative has put a figure on that disagreement. → See the Narrative with its higher Fair Value, assumptions and all.

Hunt For Mispriced Earnings Power

Nomura Holdings just showed how quarterly noise and a muted share price can leave the bigger earnings story unresolved. The real opportunity is finding stocks that could be undervalued before the market corrects them.

• Company 1 - 35% below our estimate - expands large scale infrastructure projects where governments outsource design, seismic upgrades and long term maintenance commitments.
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• Company 3 - 42% below our estimate - shifts car buyers into bundled used vehicle, servicing and insurance packages sold through a tightly controlled store network.

Three companies from the same screener. Open the full list of 14 companies trading below our fair value estimates →

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