TechMatrix (TSE:3762) posted an uptick in net profit margins to 6.6%, up from 6.4% a year ago, and is forecasting earnings growth of 16.06% per year. This pace is higher than both the Japanese market average of 7.8% earnings growth and a projected 4.5% for revenue. Over the past five years, annual earnings growth has averaged 16.8%, while revenue is expected to climb 11.6% per year going forward. With no risks flagged, ongoing growth and high earnings quality have contributed to a positive outlook for investors.
See our full analysis for TechMatrix.
Next, we will see how these headline figures compare with the widely followed narratives that drive market sentiment. Sometimes they confirm the consensus; other times they may surprise the crowd.
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TSE:3762 Revenue & Expenses Breakdown as at Nov 2025
The company’s price-to-earnings ratio of 19.7x is not only above the Japanese IT industry average of 17.3x, but also notably higher than its peer group’s 15.6x. This indicates investors are paying a visible premium for each unit of TechMatrix’s current profits compared to similar companies.
Despite trading at this premium, the narrative suggests TechMatrix continues to draw investor interest due to its robust growth rates and stable profitability.
Critics might question the valuation. However, the persistent margin and revenue outperformance compared to sector averages points to sustained confidence in the firm’s earning power.
A share price below DCF fair value (¥2,185 vs. DCF fair value of ¥3,799.82) may offer an entry point that aligns with stronger long-term return potential.
Earnings are forecast to grow at 16.06% per year, comfortably outpacing the Japanese market’s 7.8% average. This reflects expectations for double the growth versus most comparable companies in the sector.
This momentum strongly supports the narrative that TechMatrix’s ongoing investments and sector tailwinds are translating into durable, above-market expansion.
Annual earnings growth of 16.8% over the past five years supports claims about execution and sector leadership.
Revenue growth projected at 11.6% per year shows that commercial traction is matched by strong topline fundamentals.
The current share price of ¥2,185 trades well below the DCF fair value estimate of ¥3,799.82, highlighting a disconnect between recent market pricing and the company’s calculated intrinsic worth.
This gap reinforces arguments that, even with a premium earnings multiple, there may be overlooked upside for investors seeking growth at a reasonable price.
This is especially relevant considering the company’s track record of high earnings quality and continuous improvements in net profit margins.
No flagged risks in filings further supports the case for disciplined, sustainable growth according to prevailing analysis.
Story Continues
Don’t just look at this quarter; the real story is in the long-term trend. We’ve done an in-depth analysis on TechMatrix’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.
Despite TechMatrix’s strong growth and earnings, its premium valuation relative to peers means investors are paying more for each unit of profit.
If you’re looking for stronger value, use these 836 undervalued stocks based on cash flows to focus on other companies whose share prices align more closely with their underlying fundamentals.
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.
Companies discussed in this article include 3762.T.
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