Capital Markets company Nomura is taking Wall Street by surprise today, falling to $6.77 and marking a -3.1% change compared to the S&P 500, which moved 0.0%.
NMR currently sits within range of its analyst target price of $7.08, which implies that its price may remain stable for the near future. Indeed, the average analyst rating for the stock is hold. Over the last year, Nomura has underperfomed the S&P 500 by -2.4%, moving 12.9%.
Nomura Holdings, Inc. provides various financial services to individuals, corporations, financial institutions, governments, and governmental agencies worldwide. The company is part of the financial services sector, alongside a staggering variety of banking, mortgage, insurance,and credit service companies. If there is one common denominator among all companies in the sector, it’s that they are all dedicated to maintaining and developing new systems for the storage and transfer of value and risk.
Nomura's trailing 12 month P/E ratio is 8.2, based on its trailing EPS of $0.83. The company has a forward P/E ratio of 12.1 according to its forward EPS of $0.56 -- which is an estimate of what its earnings will look like in the next quarter. As of the third quarter of 2024, the average Price to Earnings (P/E) ratio for US finance companies is 15.92, and the S&P 500 has an average of 29.3. The P/E ratio consists in the stock's share price divided by its earnings per share (EPS), representing how much investors are willing to spend for each dollar of the company's earnings. Earnings are the company's revenues minus the cost of goods sold, overhead, and taxes.
Another valuation metric for analyzing a stock is its Price to Book (P/B) Ratio, which consists in its share price divided by its book value per share. The book value refers to the present liquidation value of the company, as if it sold all of its assets and paid off all debts). Nomura's P/B ratio of 0.01 indicates that the market value of the company is less than the value of its assets -- a potential indicator of an undervalued stock. The average P/B ratio of the Finance sector was 1.78 as of the third quarter of 2024.
Since it has a Very low P/E ratio, an exceptionally low P/B ratio., and No published cashflows with an unknown trend, Nomura is likely overvalued at today's prices. The company has strong growth indicators because of a PEG ratio of less than 1 and strong operating margins with a positive growth rate. We hope you enjoyed this overview of NMR's fundamentals. Be sure to check the numbers for yourself, especially focusing on their trends over the last few years.
