--- title: "Is There Now an Opportunity in NEC (TSE:6701) After Recent Share Price Volatility?" type: "News" locale: "en" url: "https://longbridge.com/en/news/281663752.md" description: "NEC's current share price is ¥4,046, reflecting mixed performance with a 1.4% gain over the past week but a 25.5% decline year-to-date. A Discounted Cash Flow analysis suggests the stock is undervalued by 26.6%, with an intrinsic value of ¥5,510 per share. Additionally, NEC's P/E ratio of 21.9x is above the industry average, indicating it is trading below its fair ratio of 31.1x. Overall, the analysis points to NEC being undervalued, with potential for future growth." datetime: "2026-04-03T22:03:33.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/281663752.md) - [en](https://longbridge.com/en/news/281663752.md) - [zh-HK](https://longbridge.com/zh-HK/news/281663752.md) --- # Is There Now an Opportunity in NEC (TSE:6701) After Recent Share Price Volatility? - Wondering whether NEC is offering fair value at its current share price of ¥4,046, or if the market is missing something that you can see. - The stock has seen mixed recent returns, with a 1.4% gain over the last 7 days, a 3.5% decline over 30 days, a 25.5% decline year to date, and a 36.8% return over the past year, alongside a very large 3 year return and a 228.8% return over 5 years. - These moves have come as investors continue to digest broader newsflow around NEC's role in software and technology solutions, sector wide sentiment, and changing expectations about long term demand. Even without a single headline defining the story, the price action suggests views on risk and opportunity are still shifting. - NEC currently holds a valuation score of 3/6. The rest of this article will weigh that score against common valuation tools and then finish with a more complete way to think about what the shares could be worth. NEC delivered 36.8% returns over the last year. See how this stacks up to the rest of the IT industry. ### Approach 1: NEC Discounted Cash Flow (DCF) Analysis A Discounted Cash Flow, or DCF, model estimates what a company could be worth by projecting its future cash flows and discounting them back to today. It essentially asks what all of NEC's future cash flows are worth in today's money. NEC's latest twelve month free cash flow is about ¥341.2b. Analysts and extrapolated estimates point to free cash flow of ¥453.4b by the year to March 2030, with a detailed 10 year path of projections. These are discounted back using a 2 Stage Free Cash Flow to Equity model. All cash flows here are in ¥, which matches the listing currency for the shares. When all those discounted cash flows are added up, the model suggests an intrinsic value of about ¥5,510 per share. Compared with the current share price of ¥4,046, this implies the stock is around 26.6% undervalued on this methodology. **Result: UNDERVALUED** Our Discounted Cash Flow (DCF) analysis suggests NEC is undervalued by 26.6%. Track this in your watchlist or portfolio, or discover 20 more high quality undervalued stocks. 6701 Discounted Cash Flow as at Apr 2026 Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for NEC. ### Approach 2: NEC Price vs Earnings For profitable companies like NEC, the P/E ratio is a useful shortcut because it shows how much investors are paying for each unit of current earnings. It ties the share price directly to what the business is already generating, rather than just to sales or assets. What counts as a “normal” P/E depends on what the market expects for future growth and how risky those earnings appear. Higher expected growth and lower perceived risk usually support a higher P/E, while slower growth and higher risk tend to align with a lower P/E. NEC currently trades on a P/E of about 21.9x. That is above the IT industry average of about 14.5x and slightly above the peer average of about 21.0x. Simply Wall St also calculates a proprietary “Fair Ratio” for NEC of about 31.1x. This is the P/E level suggested after considering earnings growth, industry, profit margins, market cap and risk factors together. This Fair Ratio can be more informative than a simple comparison with peers or the industry because it adjusts for NEC specific drivers, rather than assuming every company deserves the same multiple. Since 31.1x is higher than the current 21.9x, this approach points to NEC trading below that Fair Ratio. **Result: UNDERVALUED** TSE:6701 P/E Ratio as at Apr 2026 P/E ratios tell one story, but what if the real opportunity lies elsewhere? Start investing in legacies, not executives. Discover our 10 top founder-led companies. ## Upgrade Your Decision Making: Choose your NEC Narrative Earlier it was mentioned that there is an even better way to understand valuation. Narratives step in as a simple way for you to attach a clear story about NEC to the numbers, linking your view on its future revenue, earnings and margins to a forecast and then to a fair value that can be compared with the current share price. On Simply Wall St's Community page, Narratives let you pick or build a view that fits how you see NEC. That view then drives a live valuation that updates automatically when new information such as earnings, guidance or news on areas like BluStellar, domestic IT or international expansion is added. For example, one NEC Narrative on the cautious side currently anchors around a fair value of ¥5,000 per share, while a more optimistic Narrative points to ¥5,450 and another to ¥6,362.5. This shows how different assumptions about long term demand, margins and P/E in the ¥3,787b to ¥4,021.3b revenue range and ¥291.3b to ¥335.2b earnings range can reasonably lead to very different views on what the shares are worth. Do you think there's more to the story for NEC? Head over to our Community to see what others are saying! TSE:6701 1-Year Stock Price Chart _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._ ### Valuation is complex, but we're here to simplify it. Discover if NEC might be undervalued or overvalued with our detailed analysis, featuring **fair value estimates, potential risks, dividends, insider trades, and its financial condition.** Access Free Analysis ### Related Stocks - [8793.JP](https://longbridge.com/en/quote/8793.JP.md) - [6701.JP](https://longbridge.com/en/quote/6701.JP.md) - [1973.JP](https://longbridge.com/en/quote/1973.JP.md) ## Related News & Research - [Crescent Communities closes on land for NOVEL Norterra multifamily project in Phoenix](https://longbridge.com/en/news/293359654.md) - [NEC signs supply contract for I-2SEA India-Southeast Asia subsea cable system](https://longbridge.com/en/news/291610403.md) - [Kalmar Oyj (HLSE:KALMAR) Gains Attention Following Earnings And Guidance As Undervalued View Holds](https://longbridge.com/en/news/293624425.md) - [Is Anterix (ATEX) Expensive Following Its Sharp Share Price Surge?](https://longbridge.com/en/news/293587200.md) - [NEC Participates in NATO CCDCOE's Cyber Defense Exercise "Locked Shields 2026"](https://longbridge.com/en/news/290591953.md)