MonotaRO (TSE:3064) shares are moving after the company released its non-consolidated sales results for December 2025, reporting monthly sales of ¥31,390 million compared with ¥24,159 million in the same month a year earlier.

See our latest analysis for MonotaRO.

The December sales announcement comes after a mixed stretch for MonotaRO’s shares, with a 30 day share price return of an 11.49% decline but a 90 day gain of 10.24%, while the 1 year total shareholder return is an 8.68% decline. Recent trading suggests some momentum has cooled in the short term, even as the longer multi year total shareholder return of 15.75% still reflects earlier strength.

If this sales update has you rethinking industrial names, it could be a good moment to broaden your watchlist with fast growing stocks with high insider ownership and see what else is catching attention.

With December sales at ¥31,390 million and the share price trading below some analyst estimates and intrinsic value models, you now have to ask whether MonotaRO is quietly undervalued or whether the market is already pricing in future growth.

Price-to-Earnings of 35.9x: Is it justified?

On the numbers provided, MonotaRO trades on a P/E of 35.9x at a last close of ¥2,234, while our DCF estimate of future cash flow value sits at ¥2,647.49, which implies the shares are priced below that modelled fair value even though the earnings multiple screens as expensive against peers.

The P/E multiple compares the current share price with earnings per share, so a higher ratio means investors are paying more for each unit of profit. For MonotaRO, that 35.9x sits well above the JP Trade Distributors industry average of 11.2x and a peer average of 13.3x, which points to the market assigning a premium to the company’s earnings profile.

At the same time, the SWS DCF model looks at projected future cash flows and discounts them back to today, which is why it can flag undervaluation even when the headline P/E looks rich. In this case, the estimated fair P/E of 23.3x is also well below the current 35.9x, suggesting the market price is materially higher than the level that regression based fair ratio implies, and that premium would need to be weighed against factors like MonotaRO’s 26.1% past year earnings growth, 15.4% five year annual earnings growth and high 26.6% return on equity.

Explore the SWS fair ratio for MonotaRO

Result: Price-to-Earnings of 35.9x (OVERVALUED)

However, you also have to weigh risks such as the high 35.9x P/E multiple and the recent 30 day share price decline of 11.49%.

Find out about the key risks to this MonotaRO narrative.

Another View: What Our DCF Model Says

While the 35.9x P/E looks rich against an estimated fair ratio of 23.3x and much lower industry and peer averages, the SWS DCF model paints a different picture. It puts MonotaRO’s value at ¥2,647.49 per share, around 15.6% above the current ¥2,234 price. This raises a simple question: is the market too focused on the headline multiple?

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 MonotaRO 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 867 undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own MonotaRO Narrative

If you see the numbers differently or prefer to build your own view from the ground up, you can shape a custom MonotaRO story in just a few minutes: Do it your way.

A great starting point for your MonotaRO research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision.

Looking for more investment ideas?

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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.