Hazama Ando (TSE:1719) is in focus after reporting first quarter results, updating dividend guidance and outlining earnings expectations for the fiscal year ending March 2027. This gives investors fresh data to assess the stock.
See our latest analysis for Hazama Ando.
At a share price of ¥1,892.5, Hazama Ando has seen short term share price returns in positive territory, including a 1-month share price return of 3.76%. Longer term total shareholder returns of 16.73% over 1 year and 196.85% over 5 years indicate momentum that has been building over time.
If the latest earnings and dividend news has you thinking about what else is moving, it could be a good moment to scan 36 power grid technology and infrastructure stocks
After Hazama Ando's strong run and fresh guidance on earnings and dividends, the key issue now is the balance of risk and reward at ¥1,892.5. Do the current fundamentals still leave room for upside in the valuation?
Price-to-Earnings of 9.6x: Is it justified?
On the latest figures, Hazama Ando trades on a P/E of 9.6x, which screens as good value compared with both peers and the wider Japan construction industry.
The P/E ratio compares the current share price to earnings per share. For a construction group like Hazama Ando, it gives you a quick read on how the market is valuing current earnings power relative to similar companies in the same sector.
Analysts flag that Hazama Ando looks attractively priced on this basis, with the current P/E below the Japan construction industry average of 11.1x and below the peer average of 15x. The company is also trading at a discount to an estimated fair P/E of 10.4x, which points to a level the market could move towards if sentiment aligns with those assumptions.
Explore the SWS fair ratio for Hazama Ando
Result: Price-to-Earnings of 9.6x (UNDERVALUED)
However, Hazama Ando still faces risks if annual net income growth pressure persists or if project execution in civil engineering and overseas markets encounters setbacks.
Find out about the key risks to this Hazama Ando narrative.
Another view using the SWS DCF model
The SWS DCF model offers a different angle on Hazama Ando. On this approach, the stock at ¥1,892.5 is described as trading below an estimated future cash flow value of ¥2,487.48, which frames it as undervalued. How much weight do you want to give that cash flow view compared with the earnings multiple story?
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 Hazama Ando 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 25 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
Given the mixed signals around Hazama Ando's valuation and outlook, it makes sense to review the detail yourself and decide quickly where you stand. You can weigh both sides of the story by checking the 4 key rewards and 2 important warning signs.
Looking for more investment ideas beyond Hazama Ando?
If Hazama Ando has sharpened your focus on valuation and fundamentals, do not stop here. Use these screeners to uncover other stocks that might deserve a closer look.
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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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