NTT Data Intramart (TSE:3850) Margin Improvement Reinforces Bullish Narratives Despite Premium Valuation

NTT Data Intramart (TSE:3850) delivered net profit margins of 5.4%, improving from 3.8% last year, with earnings soaring 60.7% year-over-year. This is far above the company’s five-year average growth of 9.5% annually. Revenue is projected to rise 6.5% per year, outpacing the broader JP market’s 4.5% forecast, while earnings are expected to keep climbing at 27.6% per year compared to 7.9% for the market. Investors are watching the company’s sustained profit and revenue gains, high-quality earnings, and recent margin expansion as clear positives. However, the stock’s elevated price-to-earnings ratio means future results will likely face higher scrutiny.

See our full analysis for NTT Data Intramart.

Now, let’s see how these standout results stack up against Simply Wall St’s consensus narratives. The numbers offer support for some long-held views but may call others into question.

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• The company’s net profit margin climbed to 5.4%, above last year’s 3.8%, confirming clear improvement in operational efficiency.

• Sustained margin gains heavily support the bullish case that NTT Data Intramart is increasing its ability to turn sales into profits.

  • This level of margin improvement stands out against many IT sector peers, who struggle to boost efficiency at a similar pace.

  • With no risks highlighted in the data, the upward margin trend sharpens the case for consistent, high-quality earnings durability. This is seen as an anchor for bullish optimism on future growth.

• Future earnings are forecast to rise 27.6% per year, far higher than the broader JP market’s 7.9% growth expectation.

• Market observers see this pace as an indicator that NTT Data Intramart is tapping into sector tailwinds from digital transformation.

  • Revenue expansion is also expected to outstrip the overall JP market, reinforcing the idea that the company’s growth drivers are not just cyclical but structural.

  • Strong projected earnings trajectory creates a potential runway for above-average shareholder returns, provided that execution risks remain low as suggested by the lack of flagged risks.

• The current share price of ¥3,590 trades at a steep premium to the DCF fair value of ¥185.67, and a price-to-earnings ratio of 25.6x outpaces both the JP software industry average (21.1x) and peer average (23.7x).

• What’s surprising is that despite the elevated valuation, the company’s aggressive growth and profitability metrics are strong enough to justify investor interest if momentum persists.

  • However, any stumble in delivering on these growth rates could put the premium multiples at risk of a sharp de-rating for shareholders.

  • The valuation gap versus fair value means investors are betting that current trends are sustainable, making near-term performance and execution a critical focus in the period ahead.