Freund (TSE:6312) Margin Rebound To 7.2% Challenges Earnings Decline Narrative

Freund (TSE:6312) has posted its Q3 2026 numbers with revenue of ¥6.8 billion and basic EPS of ¥33.85, while the trailing twelve months show revenue of ¥27.9 billion and basic EPS of ¥117.74. The company has seen revenue move from ¥22.6 billion and basic EPS of ¥31.42 over the trailing period ending Q2 2025 to ¥27.9 billion and EPS of ¥117.74 by Q3 2026, alongside net income rising from ¥531 million to ¥1,992 million. With margins now sitting above last year, investors can assess how durable this earnings rebound may be.

See our full analysis for Freund.

With the headline figures on the table, the next step is to set these results against the most widely held narratives about Freund to see which views the latest margins support and which might need a rethink.

Curious how numbers become stories that shape markets? Explore Community Narratives

Margins Step Up To 7.2%

• Over the last 12 months, Freund converted ¥27,850 million of revenue into ¥1,992 million of net income, which works out to a 7.2% net profit margin compared with 3.5% a year earlier in the same dataset.
• What is interesting for a bullish view is that earnings grew by about 141.7% over the past year and by about 10.4% per year over five years, yet analysts are still forecasting earnings to fall by about 13.8% per year. This sets up a clear tension between:
  • Trailing performance that shows higher profitability on the current 7.2% margin and higher earnings than the prior year in this data,
  • And forward expectations that earnings will contract even though the recent margin level and profit base are higher than they were a year ago in the same dataset.

To see how this margin shift stacks up against different long term storylines for Freund, check out the full balanced narrative many investors are watching. 📊 Read the full Freund Consensus Narrative.

P/E Of 9.2x Versus Peers

• The shares trade on a trailing P/E of 9.2x, which is below both the 13.3x average for the JP Machinery industry and the 11.8x peer average, and also below the DCF fair value of ¥1,680.49 compared with the current share price of ¥1,077.
• Supporters of a bullish stance often point to this gap between price and fundamentals, and here the data offers a few clear talking points:
  • The P/E discount to the industry comes alongside the 7.2% net margin, which is higher than the 3.5% margin recorded a year earlier in the same trailing data, so the lower multiple is not paired with weaker profitability in this dataset,
  • While the market price of ¥1,077 sits well below the DCF fair value reference of ¥1,680.49, which some bullish investors treat as evidence that the current valuation does not fully reflect the trailing earnings and margin profile.

Earnings Rebound And Forecast Declines

• On a trailing 12 month basis, net income in the dataset moved from ¥531 million at the period ending Q2 2025 to ¥1,992 million by Q3 2026, while forward looking data in the same summary points to about a 0.5% annual decline in revenue and about a 13.8% annual decline in earnings over the next three years.
• Bears focus on those forecast declines, and the numbers here give them and bulls specific points to debate:
  • The 141.7% earnings growth over the past year in the dataset and the 10.4% per year growth over five years present a strong trailing record that bulls can reference,
  • Yet the forecast of falling earnings and modest revenue decline suggests analysts see conditions in the next few years as different from the trailing period, despite the higher 7.2% margin and higher net income currently shown in the data.

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 Freund'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.

See What Else Is Out There

Freund's recent earnings rebound sits alongside analyst expectations for about a 0.5% annual revenue decline and a 13.8% annual earnings decline over the coming years.

If that mismatch between recent results and projected contraction concerns you, use our stable growth stocks screener (2148 results) to focus on companies with steadier revenue and earnings profiles through different conditions.

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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