Never miss an important update on your stock portfolio and cut through the noise. Over 7 million investors trust Simply Wall St to stay informed where it matters for FREE.
-
If you are wondering whether BYD’s current share price reflects its true worth, you are not alone, as many investors are asking the same question before making their next move.
-
BYD’s shares last closed at HK$98.5, with returns of a 2.2% decline over 7 days, 5.2% over 30 days, a 0.3% decline year to date, 8.7% over 1 year, 27.2% over 3 years, and 24.6% over 5 years, a mixed set of numbers that naturally raises questions about value and risk.
-
Recent headlines around BYD have focused on its position in electric vehicles and batteries, alongside ongoing attention on how competition and regulation affect major auto makers. These themes provide helpful context when thinking about how the stock has traded and what could be influencing sentiment.
-
Right now BYD has a valuation score of 2 out of 6, which means it screens as undervalued on 2 of the 6 checks used in the analysis. Next, we look at how different valuation methods assess the stock, before finishing with a way of thinking about value that goes beyond any single model.
BYD scores just 2/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.
A Discounted Cash Flow, or DCF, model estimates what a company could be worth by projecting its future cash flows and then discounting them back to today’s value. It is essentially asking what those future CN¥ cash flows are worth in present terms.
For BYD, the latest twelve month free cash flow is a loss of CN¥29,051.48m. Analysts and internal estimates project CN¥61,159.21m of free cash flow in 2026 and CN¥73,877.89m in 2027, with further CN¥ cash flows projected each year out to 2035 using a 2 Stage Free Cash Flow to Equity model. Simply Wall St uses analyst estimates where available, then extends the series using its own growth assumptions.
When all those projected cash flows are discounted back, the model arrives at an estimated intrinsic value of HK$135.32 per share, compared to the recent share price of HK$98.50. This implies the shares trade at a 27.2% discount to this DCF estimate, which indicates the stock screens as undervalued on this model.
Result: UNDERVALUED
Our Discounted Cash Flow (DCF) analysis suggests BYD is undervalued by 27.2%. Track this in your watchlist or portfolio, or discover 888 more undervalued stocks based on cash flows.
For profitable companies, the P/E ratio is a common way to think about value because it directly links what you pay for the stock to the earnings the business is generating today. The higher the expected growth and the lower the perceived risk, the higher a “normal” or “fair” P/E ratio investors are usually willing to accept.
BYD currently trades on a P/E of 20.88x. That is above the Auto industry average P/E of 17.68x and above the broader peer group average of 8.34x, so on simple comparisons the shares look relatively expensive.
Simply Wall St also calculates a Fair Ratio of 13.83x for BYD. This is a proprietary estimate of what the P/E could be, after accounting for factors such as the company’s earnings growth profile, its industry, profit margins, market capitalization and specific risks. Because it adjusts for these elements, the Fair Ratio can give you a more tailored view than a basic comparison with peers or the industry.
Comparing the current P/E of 20.88x with the Fair Ratio of 13.83x suggests BYD is trading above this tailored valuation yardstick, so on this measure the stock screens as overvalued.
Result: OVERVALUED
P/E ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1424 companies where insiders are betting big on explosive growth.
Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives, which are simply your own story about BYD linked directly to your assumptions about fair value, future revenue, earnings and margins.
On Simply Wall St, Narratives sit inside the Community page and let you connect BYD’s business story to a financial forecast, then to a fair value, in a way that feels more natural than staring at ratios in isolation.
You can see how your fair value compares with today’s share price. This can help you decide whether you feel more comfortable buying, holding or selling, and the Narrative automatically refreshes when new news or earnings data is added to the platform.
For example, some BYD Narratives in the Community attach a higher fair value with stronger margin and revenue assumptions. Others use more conservative forecasts and arrive at a lower fair value, showing how different investors can look at the same company and reach very different price views.
Do you think there’s more to the story for BYD? Head over to our Community to see what others are saying!
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Companies discussed in this article include 1211.HK.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com
