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Kyowa Kirin (TSE:4151) has posted steady revenue growth over the past year, with its annual net income rising by 18%. The company’s shares have climbed 10% in the past month, drawing more eyes to its performance.

See our latest analysis for Kyowa Kirin.

After a relatively sluggish start to the year, Kyowa Kirin’s share price has picked up momentum with a 1-month share price return of 9.7%. That said, its total shareholder return has been slightly negative over the past twelve months and remains underwhelming across three and five years. This suggests the recent pop may reflect shifting sentiment or renewed optimism for the company’s outlook.

If this renewed momentum has you curious about what else is gaining traction, now is a perfect time to broaden your search and discover fast growing stocks with high insider ownership

With fundamentals on the rise and shares still trading just below analyst targets, the question for investors now is whether Kyowa Kirin’s recent jump signals a real buying opportunity or if the market has already factored in its future growth.

Kyowa Kirin trades at a notably high price-to-earnings (P/E) ratio of 35.7x, placing it well above both the Japanese pharmaceutical industry average and its closest peers. At the last close of ¥2,492, the stock commands a premium valuation from the market.

The P/E multiple reflects how much investors are willing to pay for each unit of the company’s earnings. In pharmaceutical and biotech sectors, high P/E ratios often signal anticipated future profits, innovation, or defensiveness. However, they can also indicate that expectations may already be priced in, especially if recent earnings have faced significant volatility.

When compared to the industry average P/E of 15.3x and the peer average of 16.5x, Kyowa Kirin’s valuation stands out as particularly expensive. The P/E ratio also exceeds the estimated fair value multiple of 22.8x, suggesting that the current price could decline if market sentiment shifts or growth underdelivers.

Explore the SWS fair ratio for Kyowa Kirin

Result: Price-to-Earnings of 35.7x (OVERVALUED)

However, sluggish long-term returns and a steep premium to peers could both act as potential headwinds for Kyowa Kirin’s optimistic outlook.

Find out about the key risks to this Kyowa Kirin narrative.

While Kyowa Kirin’s high price-to-earnings ratio suggests the stock is expensive compared to peers, the Simply Wall St DCF model offers a very different perspective. This methodology estimates Kyowa Kirin is trading roughly 53% below its fair value, challenging the notion that shares are overvalued. Could the market be missing something?

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 Kyowa Kirin 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 886 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.

If you approach valuations with a different perspective or want to see trends for yourself, you can quickly analyze the numbers and craft a story in just a few minutes. Do it your way

A great starting point for your Kyowa Kirin research is our analysis highlighting 2 key rewards and 2 important warning signs that could impact your investment decision.

Markets move fast and the best opportunities do not wait long. Give yourself an edge by checking out a range of standout companies tailored to your interests.

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 4151.T.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com

Steep penalties

Indonesian authorities say they have taken down more than 5.7 million pieces of gambling-related online content over the past eight years.

Police have also stepped up enforcement, with at least 85 influencers arrested last year for promoting online betting.

Penalties are steep, including potential prison terms of up to 10 years, while gambling itself is punishable by up to four years in jail.

The Ministry of Communication and Digital Affairs said it regularly asks social media platforms to remove gambling-related content, and issues warning letters if those requests go unanswered.

“Continued inaction will result in a third warning letter sent to the platform, which carries additional penalties and may lead to access termination,” Alexander Sabar, director general for digital space supervision, told AFP.

In October, the ministry temporarily suspended TikTok’s operating license because the platform refused to provide data related to the alleged monetisation of live activities from accounts suspected of online gambling.

AFP asked Sabar if the minister will summon Meta following the findings of paid gambling ads.

He said the ministry maintains regular communication with social media platforms, and often raises the issue of gambling adverts.

The ministry “urges all digital platforms to strengthen their ad detection and moderation systems in accordance with Indonesian laws and regulations”, Sabar told AFP on November 12.

“Should repeated violations be found and left unaddressed, we will take enforcement in line with the applicable regulations.”