<div id="readability-page-1"><div><p>Nichias (TSE:5393) has wrapped up FY 2026 with fourth quarter revenue of ¥66.9b and net income of ¥10.4b, while the trailing 12 month totals sit at ¥251.9b of revenue and ¥31.6b of net income, supported by a Basic EPS of ¥496.77. The company has seen quarterly revenue move from ¥63.6b in FY 2025 Q4 to ¥66.9b in FY 2026 Q4, with net income shifting from ¥9.0b to ¥10.4b over the same period, bringing margins and earnings quality into focus for investors interpreting the latest release.</p> <p>See our full analysis for Nichias.</p><p>With the headline numbers on the table, the next step is to see how they line up against the most widely shared narratives around Nichias, highlighting where the data supports the story and where it pushes back.</p> <p>Curious how numbers become stories that shape markets? Explore Community Narratives</p> <figure><img height="476" src="https://imageproxy.pbkrs.com/https://images.simplywall.st/company/80f49a19-9d9f-4ecc-8495-f744985555da/chart/revenue-and-expenses-breakdown/query-ZGF0ZT0yMDI2LTA1LTEy?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" width="746" original-src="https://imageproxy.pbkrs.com/https://images.simplywall.st/company/80f49a19-9d9f-4ecc-8495-f744985555da/chart/revenue-and-expenses-breakdown/query-ZGF0ZT0yMDI2LTA1LTEy"/><figcaption>TSE:5393 Revenue &amp; Expenses Breakdown as at May 2026</figcaption></figure> <h2>12.6% Net Margin Puts Profit Quality in Focus</h2> <ul> <li>Over the last 12 months, Nichias booked ¥251.9b in revenue and ¥31.6b in net income, which translates into a 12.6% net margin that is slightly higher than the prior year's 12.5% margin.</li> <li>Bears point to the recent year of weaker earnings, yet the data also shows about 15% annual earnings growth over the last five years and this steady 12.6% margin, which together sit at odds with a view that profitability is structurally deteriorating.     <ul> <li>Critics highlight that earnings over the most recent year declined compared with the prior year, while the longer term figure of about 15% yearly earnings growth indicates a different picture over several years.</li> <li>What stands out is that the margin held close to 12.5% to 12.6% even as reported earnings dipped in the latest year, which challenges a bearish claim that profitability is weakening across the board.</li> </ul> </li> </ul> <h2>4.7% Revenue Growth Versus Japan Market</h2> <ul> <li>Trailing 12 month revenue growth for Nichias is shown at 4.7% per year, compared with a 6.1% per year revenue growth forecast for the broader Japan market, and earnings are forecast to grow about 4.6% per year versus 10.3% for the market.</li> <li>A cautious bearish view focuses on this slower forecast growth, and the numbers here support that concern by showing both revenue and earnings expectations below the Japan averages, even though the company has that longer term 15% earnings growth record in the background.     <ul> <li>Bears argue that with forecast earnings growth at about 4.6% per year compared with 10.3% for the market, Nichias may not keep pace with broader profit growth, and the 4.7% revenue growth rate versus 6.1% for the market reinforces that gap.</li> <li>At the same time, the earlier 15% five year earnings growth shows the company has produced stronger expansion in the past, which creates a contrast between historic performance and these more modest forward looking figures.</li> </ul> </li> </ul><p> Skeptics often stop at the slower 4.6% earnings forecast, but the full bear case also leans on how far that is from market growth expectations and how it interacts with valuation and cash flow assumptions, which are laid out in the <strong>🐻 Nichias Bear Case</strong></p><h2>P/E Of 22.7x And Price Above DCF Value</h2> <ul> <li>Nichias trades on a 22.7x P/E at a share price of ¥3,762, compared with a peer average P/E of 28.6x, an industry P/E of 14.4x, and a DCF fair value of ¥2,542.60 based on the trailing 12 months.</li> <li>The more bullish angle highlights that the 22.7x P/E is below the 28.6x peer average and that earnings quality has been flagged as high, yet the fact that the share price sits above the ¥2,542.60 DCF fair value and above the 14.4x industry P/E gives investors concrete numbers to weigh when testing that optimistic stance.     <ul> <li>Supporters like that the company looks cheaper than its peers on P/E, yet the stock is still priced higher than the Japan building industry average multiple, which brings sector level value comparisons into the discussion.</li> <li>There is also a clear gap between the current ¥3,762 share price and the ¥2,542.60 DCF fair value estimate, so anyone leaning bullish needs to reconcile that difference with the trailing 12.6% margin and the five year 15% earnings growth figure.</li> </ul> </li> </ul><p> If you want to see how this balance of a 22.7x P/E, high quality earnings and a share price above DCF value is being debated across different viewpoints, it is worth reading the wider range of perspectives in the <strong>📊 Read the what the Community is saying about Nichias.</strong></p><h2>Next Steps</h2> <p>Don't just look at this quarter; the real story is in the long-term trend. We've done an in-depth analysis on Nichias'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.</p> <p>If the mixed signals in the numbers leave you unsure, that is the point, you are meant to test the story yourself. Take a closer look at how the positives stack up by reviewing the 1 key reward.</p> <h2>See What Else Is Out There</h2> <p>Nichias combines solid margins with a 22.7x P/E above its DCF value and forecast revenue and earnings growth that trail broader Japan market expectations.</p> <p>If that mix of slower projected growth and a share price above DCF value feels limiting, broaden your watchlist by scanning the 11 high quality undervalued stocks right now.</p> <p><em> This article by Simply Wall St is general in nature. <strong>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.</strong> 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.</em></p><div><h3>Valuation is complex, but we're here to simplify it.</h3><p>Discover if Nichias might be undervalued or overvalued with our detailed analysis, featuring <strong>fair value estimates, potential risks, dividends, insider trades, and its financial condition.</strong></p><p>Access Free Analysis</p></div></div></div>

5393

<p>Nichias (TSE:5393) reported FY 2026 Q4 revenue of ¥66.9b and net income of ¥10.4b, maintaining a net margin of 12.6%. Despite a decline in earnings compared to the previous year, the company has achieved a 15% annual earnings growth over the last five years. Revenue growth of 4.7% lags behind the broader Japan market's 6.1% forecast. Trading at a P/E of 22.7x, Nichias's share price of ¥3,762 exceeds its DCF fair value of ¥2,542.60, raising questions about its valuation amidst mixed growth expectations.</p>

Nichias (TSE:5393) Net Margin Holds At 12.6% Challenging Bearish Profitability Narratives