One-glance verdict
Undervalued
$32.17 our estimate vs market $13.46
58% below our estimate, below the bear case
Fundamentals snapshot
Sumitomo Rubber Industries, Ltd.
SMTUF · PNK · Consumer Cyclical · Auto Parts
Current price
$13.46
52-week range
$11.80 - $16.36
Market cap
$3.54B
Balance sheet
Watch
8.36x Adequate
Net debt $1.62B. 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 5205.4% above its 5-year average P/E.
What this company does
Sumitomo Rubber Industries, Ltd.
Sumitomo Rubber Industries is a Japanese company that primarily makes and sells tires for a wide range of vehicles under its well-known Dunlop and Falken brands. Because tires are its main business, the company's revenue (the money it makes from sales) is closely tied to the health of the global auto market and how much people are driving. It also has smaller businesses that sell sports gear, like golf clubs and tennis rackets, and various industrial rubber products.
How the company got here
Sumitomo Rubber's story begins in 1909 as a Japanese factory for the British company Dunlop. The Sumitomo Group, a major Japanese conglomerate, invested in the company in the 1960s, and it was renamed Sumitomo Rubber Industries in 1963. A key moment was acquiring the Dunlop brand's tire operations in several countries in the 1980s, which greatly expanded its global reach. Another significant step was merging with Ohtsu Tire & Rubber in 2003, which brought the high-performance Falken tire brand under its ownership. Over the years, it grew by supplying tires to major Japanese automakers like Toyota and Nissan.
What it actually does
Sumitomo Rubber is a company that makes a wide variety of products from rubber. Most people would recognize their main products: tires for cars, trucks, and motorcycles sold under well-known brand names like Dunlop and Falken. Beyond tires, they also have a large business making sports equipment, including golf clubs and tennis balls under brands like Srixon and Cleveland Golf. They also produce a range of other items, from rubber parts used in medical devices and office printers to artificial turf for sports fields and even earthquake protection systems for buildings.
Tire Business
This is the company's largest and most important segment, generating the majority of its revenue (the total money it brings in from sales). It manufactures and sells tires for almost every type of vehicle, including passenger cars, trucks, buses, and motorcycles. The two most famous brands you might see on the side of a tire are Dunlop and Falken. They sell these tires both directly to car manufacturers to be put on new vehicles and to retail stores for customers who need replacements.
Sports Business
This is a significant part of the company that focuses on high-performance sporting goods. They are well-known in the golf world, making and selling clubs, balls, and accessories under the Srixon, Cleveland Golf, and XXIO brand names. This segment also produces tennis gear, like rackets and balls, often using the Dunlop brand. In addition to selling equipment, this part of the business sometimes operates golf and tennis schools.
Industrial and Other Products
This segment is a collection of various rubber-based products for business and consumer use. It's a smaller piece of the company but creates a wide array of items. This includes specialized rubber parts for things like office printers and medical equipment, as well as materials for construction like floor coatings and vibration dampers that help protect buildings from earthquakes. You might also encounter their products in daily life through items like rubber gloves or on sports fields with their artificial turf.
What management is betting on now
The company's leadership is focused on a long-term strategy called "R.I.S.E. 2035," which aims to create new value from its expertise in rubber. A major priority is strengthening the global power of the Dunlop brand, especially by expanding its sales of higher-priced, premium tires in Europe and North America. They are also investing heavily in technology, such as developing "smart tires" with sensors that can detect air pressure and wear, and using artificial intelligence (AI) to predict tire performance. The goal is to have their non-tire businesses, like sports and industrial products, contribute a larger share of the company's overall profit in the future.
Price history
How the share price has moved
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Is it cheap or expensive?
Fair value $32.17 vs current price $13.46
Our most-likely fair value is $32.17 a share — about 138.9% above today's price of $13.46, so the stock currently looks cheap (undervalued).
Is it drowning in debt?
Watch
Net debt $1.6B. Interest coverage 8.4x.
Net debt
$1.62B
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 $2.26B 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 $528.25M Interest coverage 12.47x +49% vs SMTUF Carries about 1.5x more debt cushion than SMTUF.
Total debt $434.00M 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 5205.4% 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)
8.80x
Forward P/E
—
P/B
0.75x
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
$2.26B
Total cash
$640.58M
Growth
How the business has been compounding
Revenue TTM
$8.14B
Revenue 5Y CAGR
-14.9%
EPS TTM
1.53
EPS 5Y CAGR
74.9%
Cash flow
How much cash the business throws off
Operating CF TTM
$976.45M
Free CF TTM
$-185.97M
FCF margin
-2.3%
Dividend
Shareholder payout
Yield
4.1%
Payout ratio
35.7%
Last ex-div date
2026-12-29