Is the stock price high or low? In just a few minutes. Kabuyomi's "Stock Price Ruler"
You've looked up the stock price of a company you're interested in, but... is this number high? Or low? You can't judge whether a stock is overvalued or undervalued just by looking at its face value. On the other hand, calculating EPS or PER with a calculator is a bit of a hassle. Today, I'd like to introduce Kabuyomi's "Stock Price Ruler" (an EPS x PER quick-reference table), which lays out the estimates for "high or low" right from the start.
What you will learn in this article
How the "Stock Price Ruler" estimates whether the current stock price is "high or low" based on earnings (EPS) and PER.
How to read the quick-reference table using Nintendo's page as an example.
That 8 famous companies (Toyota, Nintendo, etc.) are free to view without registration, and you can try the same screen immediately after finishing this article.
What is the "Stock Price Ruler"?
It is a section within Kabuyomi's stock pages designed to help you view the current stock price from the perspective of "is it overvalued or undervalued relative to earnings?" The key point is that it uses the company's own figures to create a quick-reference table based on the relationship "Stock Price = EPS x PER." This allows you to go a step beyond the face value of the stock and see at a glance "how many times earnings it is being bought for."
(Terminology supplement: EPS = Earnings Per Share. Represents how much the company earned per share. PER = How many times the stock price is relative to earnings per share = Stock Price / EPS. The basic way to read this is that the higher the number, the more highly the stock price is valued relative to its earnings.)
You can't determine if a stock is high or low based on "face value" alone
When you first start investing in individual stocks, the easiest misconception to fall into is the assumption that "a low stock price means it's undervalued." Even if one company's stock is a few hundred yen and another's is several thousand yen, the face value itself has nothing to do with whether it is overvalued or undervalued. What matters is how many times (PER) the stock price is relative to the earnings (EPS) that one share generates. This is where you first start to get a sense of "value for money."
That said, manually lining up "what the price would be if the PER were lower, and what it would be if it were higher" is tedious work. The "Stock Price Ruler" has already done those calculations for you and listed them. Therefore, you can grasp where the current stock price sits in terms of "how many times earnings" without having to overthink it.
Following along with Nintendo
As an example, let's open the page for Nintendo, a company everyone knows. Within the "Check with Numbers" section of the stock page, you will find the "Stock Price Ruler," which lists stock prices based on Nintendo's EPS, with PER adjusted to several different levels. I recommend reading it in the following order:
First, look at what "PER multiple" the current stock price corresponds to. This serves as a benchmark for how much the market is currently valuing the company's earnings.
Next, compare the current stock price with the stock prices in each row where the PER is adjusted from low to high. By seeing whether the current price is closer to the high-PER or low-PER end of the list, you can get a sense of where the stock price stands relative to its earnings.
In the same "Check with Numbers" section, the PER position within the industry (compared to the industry median) is also listed. You can also check, "Is this company's PER high or low compared to its peers?"
Please check the actual figures such as EPS, PER, and the stock prices for each row on the Kabuyomi screen. The important thing is that by simply tracing this table, you will acquire the habit of grasping "high or low" not by the face value of the stock, but by "how many times earnings" it is. Next time you look at any company, you will be able to measure it with the same ruler.
Other ways to read it
One way is the comparative reading method. By opening the same quick-reference table for the 8 companies available for free (Toyota, Nintendo, etc.) and comparing them by aligning 'how many times the current stock price is in terms of PER,' the differences in the 'level of expectation' the market places on each company emerge. You can also experience the general trend that companies with higher future growth expectations tend to have higher PERs.
Another way is to use it as an entry point for deeper analysis. Once you grasp the position with the ruler, you can proceed to the EPS trends on the same page or perform DCF calculations by adjusting the assumptions yourself, allowing you to verify with your own hands whether 'this profit level is likely to continue.' Kabuyomi does not 'judge' whether a stock is undervalued or overvalued. Its position is that of a tool for you to read the position by laying out the facts.
Let's try it out
You can try all features for free for 8 famous companies, including Toyota and Nintendo, without registration. First, please take a look at the 'Stock Price Ruler' alignment on the Nintendo page. All other listed companies (approximately 3,900) can be read with a membership (¥980/month or ¥9,800/year, tax included).
*This article is for informational purposes only and is not investment advice recommending the buying or selling of specific stocks. Please make investment decisions at your own risk. *Since Kabuyomi's summaries and analyses are automatically generated by AI, they may contain errors. When making actual investment decisions, please be sure to check the original EDINET documents or corporate disclosure materials.
If you are a note member, we provide discount coupons for Kabuyomi in the exclusive articles below.
[For Premium Members Only] Please use the securities report AI analysis 'Kabuyomi' for free for one year
[For Pro Members Only] We offer the securities report AI analysis 'Kabuyomi' at 40% off
[For Standard Members Only] We offer the securities report AI analysis 'Kabuyomi' at 20% off
