One-glance verdict
Undervalued
$38.60 our estimate vs market $14.48
62% below our estimate, below the bear case
Fundamentals snapshot
Sumitomo Rubber Industries, Ltd.
SMTUF · PNK · Consumer Cyclical · Auto Parts
Current price
$14.48
52-week range
$12.10 - $16.36
Market cap
$3.81B
Balance sheet
Watch
8.36x Adequate
Net debt $1.58B. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
1 Risk
3 rewards · 1 risks
- Reward Revenue grew 8.4% last year.
- Reward Returns 9.0% on equity, ahead of 50% of its peers.
- Reward Free cash flow was positive in 2/10 years.
- Risk Stock trades 5642.9% above its 5-year average P/E.
What this company does
Sumitomo Rubber Industries, Ltd.
Sumitomo Rubber Industries makes and sells tires for all sorts of vehicles and also sports equipment like golf clubs and tennis rackets. Their money primarily comes from selling these tires, which are a big part of the auto industry, and it matters because it shows how well they are doing in a competitive market.
How the company got here
Sumitomo Rubber Industries, Ltd. has a history stretching back to 1909 when it began as a subsidiary of Dunlop UK in Japan. The company officially became Sumitomo Rubber Industries in 1963 after investment from the Sumitomo Group. Over the decades, it grew by supplying tires to Japanese automakers and expanded its reach through strategic acquisitions and brand development, notably integrating the Falken tire brand in 2003. This journey has positioned Sumitomo Rubber as a significant player in the global tire and rubber products market.
What it actually does
Sumitomo Rubber Industries is a global company that makes and sells a variety of rubber-based products. While most people know them for their tires, they also produce sports equipment and various industrial rubber goods. Their products are used in everything from cars and motorcycles to golf courses and medical equipment, reflecting a broad application of their rubber technology.
Tire Business
This is the largest part of Sumitomo Rubber's business, generating most of its revenue. The company manufactures and sells tires for a wide range of vehicles, including passenger cars, trucks, buses, motorcycles, and even race cars, under well-known brands like Dunlop and Falken. They also produce tire tubes and are involved in the automotive business with products like puncture repair kits. This segment is crucial for the company's global presence and financial performance.
Sports Business
Sumitomo Rubber also has a significant presence in the sports industry. This segment focuses on the manufacturing and sale of sporting goods, with a strong emphasis on golf and tennis. They produce items such as golf clubs, golf balls, tennis rackets, and tennis balls, often under brands like Srixon, XXIO, Cleveland, and Dunlop. The company also operates golf tournaments and provides golf and tennis lessons, further integrating itself into the sports community.
Industrial Products and Others
This segment encompasses a diverse range of rubber products beyond tires and sports equipment. It includes high-performance rubber items like vibration control dampers used in construction and automotive applications, as well as rubber components for office equipment and medical devices. Additionally, this segment produces everyday items such as rubber gloves and portable wheelchair ramps, showcasing the versatility of their rubber manufacturing capabilities.
What management is betting on now
Sumitomo Rubber's current strategy, known as "R.I.S.E. 2035," focuses on providing "New Experiential Value" through innovation in rubber technology and strengthening its brand management. Key priorities include enhancing the profitability of its tire business through premiumization, expanding its global reach with brands like Dunlop, and developing new growth areas. The company is also committed to sustainability, aiming to reduce its environmental impact through initiatives like retread tires and the use of renewable energy, all while striving for profitable and sustainable growth.
Price history
How the share price has moved
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Is it cheap or expensive?
Fair value $38.60 vs current price $14.48
Our most-likely fair value is $38.60 a share — about 166.5% above today's price of $14.48, so the stock currently looks cheap (undervalued).
Is it drowning in debt?
Watch
Net debt $1.6B. Interest coverage 8.4x.
Net debt
$1.58B
Interest coverage
8.36x
Sumitomo Rubber Industries, Ltd.'s profit covers its interest bill about 8.4 times over. which is stronger than most peers shown here and 1 peers sit below 1x, which is the danger zone where profit does not fully cover the interest bill.
Watch
Worse cushion
Baseline
Better cushion
SMTUF
BASELINE
Sumitomo Rubber Industries, Ltd.
Total debt $2.20B Interest coverage 8.36x This is the baseline the peer rows are being compared against.
Total debt $8.21B Interest coverage 1.47x -82% vs SMTUF Carries about 5.7x less debt cushion than SMTUF.
Total debt $523.40M Interest coverage 12.47x +49% vs SMTUF Carries about 1.5x more debt cushion than SMTUF.
Total debt $459.00M Interest coverage 25.38x +204% vs SMTUF Carries about 3.0x more debt cushion than SMTUF.
Total debt $716.68M Interest coverage 0.54x -94% vs SMTUF Carries about 15.6x less debt cushion than SMTUF.
Total debt $2.65B Interest coverage 2.18x -74% vs SMTUF Carries about 3.8x less debt cushion than SMTUF.
What you should know
The case for and against SMTUF
3 Rewards
1 Risk
Rewards
-
Revenue grew 8.4% last year.
-
Returns 9.0% on equity, ahead of 50% of its peers.
-
Free cash flow was positive in 2/10 years.
Risks
-
Stock trades 5642.9% above its 5-year average P/E.
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)
9.53x
Forward P/E
—
P/B
0.80x
P/S
0.00x
EV/EBITDA
1.50x
PEG ratio
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Profitability
How much profit each dollar creates
Gross margin
31.6%
Operating margin
7.3%
Net margin
4.9%
ROE
9.0%
ROA
4.3%
Health
Liquidity and balance-sheet strength
Debt / equity
0.45x
Current ratio
1.77x
Quick ratio
0.76x
Total debt
$2.20B
Total cash
$624.77M
Growth
How the business has been compounding
Revenue TTM
$7.94B
Revenue 5Y CAGR
-14.9%
EPS TTM
1.52
EPS 5Y CAGR
74.9%
Cash flow
How much cash the business throws off
Operating CF TTM
$952.35M
Free CF TTM
$-181.38M
FCF margin
-2.3%
Dividend
Shareholder payout
Yield
3.7%
Payout ratio
35.7%
Last ex-div date
2026-12-29