One-glance verdict
Undervalued
$37.87 our estimate vs market $8.31
Wall Street consensus: $9.09 (-76.0% lower than our fair-value estimate)
78% below our estimate, below the bear case
Fundamentals snapshot
Subaru Corporation
FUJHY · PNK · Consumer Cyclical · Auto Manufacturers
Current price
$8.31
52-week range
$7.10 - $11.70
Market cap
$11.46B
Balance sheet
Healthy
2.85x Stretched
Net cash $9.12B. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
2 Risks
3 rewards · 2 risks
- Reward Revenue grew 2.1% last year.
- Reward Returns 3.1% on equity, ahead of 60% of its peers.
- Risk Stock trades 31313.4% above its 5-year average P/E.
- Risk Operating margin compressed from 7.1% to 3.4% over 3 years.
What this company does
Subaru Corporation
Subaru Corporation is a Japanese company best known for making Subaru cars, which are very popular in North America. While they also have a smaller aerospace division that makes parts for planes and helicopters, almost all of their money comes from selling cars and car parts. This means the company's success is heavily tied to global car sales and the health of its supply chain (the network of companies that provide parts and materials for building cars).
How the company got here
Subaru's story began in 1917 as an aircraft research laboratory, which later became a major aircraft manufacturer for Japan during World War II. After the war, the company was broken up and then re-formed in 1953 as Fuji Heavy Industries, a new company that united five smaller ones. This new company shifted its focus to cars, introducing its first vehicle, the Subaru 1500, in 1954. A key turning point was the introduction of all-wheel drive (AWD) in the 1970s, which became a signature feature, and the launch of the popular Outback model in the 1990s solidified its reputation for rugged, versatile vehicles. In 2017, the company changed its name from Fuji Heavy Industries to Subaru Corporation, aligning the company's name with its well-known car brand.
What it actually does
Subaru is a Japanese company that primarily makes and sells cars, but it also has a significant aerospace division. Most people know Subaru for its cars, like the Outback, Forester, and Crosstrek, which are popular with families and people who enjoy the outdoors. These cars are known for their standard all-wheel drive (a system that sends power to all four wheels for better traction) and a unique engine design called a "boxer" engine. Beyond cars, the company also manufactures parts for airplanes and helicopters for both defense and commercial customers.
Automotive
This is Subaru's largest and most well-known business, making up the vast majority of its revenue. This segment designs, manufactures, and sells Subaru brand cars, SUVs, and crossovers to customers around the world. People buy these vehicles from a network of dealers. This part of the company is famous for its focus on safety, all-wheel drive technology, and building cars that are seen as reliable and practical.
Aerospace
This is a smaller but important part of the company that builds on its origins as an aircraft manufacturer. This division manufactures components for commercial airplanes, such as the center wing boxes for Boeing jets, and also produces helicopters and trainer aircraft for Japan's defense forces. Its customers are large aerospace companies like Boeing and the Japanese government. While it's a much smaller slice of the business than cars, it's a field where Subaru has deep expertise.
Others
This is the smallest segment of Subaru's business. It primarily involves activities like leasing out real estate properties that the company owns. For example, they might rent out stores, company housing, or warehouses. This part of the company is not a major focus and contributes a very small portion of the company's overall business.
What management is betting on now
Subaru's management is heavily focused on navigating the auto industry's shift to electric vehicles (EVs). They are investing significantly in developing their own battery electric vehicles (BEVs) and also next-generation hybrid cars, which combine a gas engine with an electric motor. The company is also aiming to have zero fatal traffic accidents in its vehicles by 2030, which means a continued big bet on improving its safety technology, like its EyeSight driver-assist system. They are also focused on strengthening their brand loyalty and profitability to fund these major investments in new technology.
Price history
How the share price has moved
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Is it cheap or expensive?
Fair value $37.87 vs current price $8.31
Wall Street consensus is the average analyst price target: $9.09 (-76.0% lower than our fair-value estimate).
Our most-likely fair value is $37.87 a share — about 355.7% above today's price of $8.31, so the stock currently looks cheap (undervalued).
Is it drowning in debt?
Healthy
Net cash $9.1B - more cash than debt. Interest coverage 2.8x.
Net debt
$-9.12B
Interest coverage
2.85x
Subaru Corporation's profit covers its interest bill about 2.8 times over. which is stronger than most peers shown here and 2 peers sit below 1x, which is the danger zone where profit does not fully cover the interest bill.
Healthy
Worse cushion
Baseline
Better cushion
FUJHY
BASELINE
Subaru Corporation
Total debt $2.31B Interest coverage 2.85x This is the baseline the peer rows are being compared against.
Total debt $58.53B Interest coverage -15.06x -100% vs FUJHY This peer has almost no interest-payment cushion compared with FUJHY.
Total debt $58.17B Interest coverage 0.51x -82% vs FUJHY Carries about 5.6x less debt cushion than FUJHY.
Total debt $5.46B Interest coverage 4.71x +65% vs FUJHY Carries about 1.7x more debt cushion than FUJHY.
Total debt $2.62B Interest coverage 12.38x +335% vs FUJHY Carries about 4.3x more debt cushion than FUJHY.
What you should know
The case for and against FUJHY
3 Rewards
2 Risks
Rewards
-
Revenue grew 2.1% last year.
-
Returns 3.1% on equity, ahead of 60% of its peers.
-
Free cash flow was positive in 4/10 years.
Risks
-
Stock trades 31313.4% above its 5-year average P/E.
-
Operating margin compressed from 7.1% to 3.4% over 3 years.
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
21.31x
Forward P/E
—
P/B
0.67x
P/S
0.00x
EV/EBITDA
-4.86x
PEG ratio
—
Profitability
How much profit each dollar creates
Gross margin
14.2%
Operating margin
3.4%
Net margin
1.8%
ROE
3.1%
ROA
0.1%
Health
Liquidity and balance-sheet strength
Debt / equity
0.13x
Current ratio
2.29x
Quick ratio
1.64x
Total debt
$2.31B
Total cash
$11.43B
Growth
How the business has been compounding
Revenue TTM
$30.53B
Revenue 5Y CAGR
8.2%
EPS TTM
0.39
EPS 5Y CAGR
-21.7%
Cash flow
How much cash the business throws off
Operating CF TTM
$2.27B
Free CF TTM
$307.24M
FCF margin
1.0%
Dividend
Shareholder payout
Yield
4.4%
Payout ratio
92.2%
Last ex-div date
2026-03-31