Evaluating BYD (SEHK:1211): Is There Still Value After a Year of Volatility?

It is not often that you see BYD (SEHK:1211) moving in a way that makes both bulls and bears pause. That is precisely what is happening now. Investors on all sides are taking a closer look at today’s moves, trying to decipher if something is stirring beneath the surface or if this is simply another chapter in the company’s ongoing story. Zooming out over the past year, BYD’s stock has seen significant ups and downs. While the past month has seen some declines, the momentum has shifted dramatically since the start of the year, with strong gains overall compared to prior periods. Add in the company’s pace of growing revenue and profits, plus a generally upbeat trajectory over multi-year windows, and it is no wonder investors are pondering what comes next. So after this mix of short-term softness and longer-term outperformance, is there real value left on the table for new buyers, or are expectations for future growth already reflected in today’s price?

BYD’s stock is currently trading at a price-to-earnings (P/E) ratio of 21.8x, which makes it appear more expensive than many of its peers in the auto sector both in Asia and in Hong Kong. The P/E ratio is a common tool for comparing a company’s current share price to its per-share earnings, helping investors assess whether expectations for future growth are already reflected in the price.

This ratio is especially relevant for fast-growing automakers like BYD because it signals how much investors are willing to pay today for future potential. However, being above the industry and market average might mean the company is priced for high expectations, which may or may not materialize.

Given these elevated multiples, the market seems to be expecting continued strong earnings growth and profitability from BYD. Whether those expectations are justified will depend on the company’s ability to deliver against ambitious forecasts in the coming years.

Result: Fair Value of $109.9 (OVERVALUED)

See our latest analysis for BYD.

However, slowing revenue growth or a sudden shift in investor sentiment could quickly challenge the current optimism around BYD’s future prospects.

Find out about the key risks to this BYD narrative.

Taking a different approach, our SWS DCF model comes up with a distinct result and suggests the shares may actually be undervalued relative to their underlying cash flows. Could the market be missing something deeper?

Look into how the SWS DCF model arrives at its fair value.

Stay updated when valuation signals shift by adding BYD to your watchlist or portfolio. Alternatively, explore our screener to discover other companies that fit your criteria.