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If you are wondering whether Grenergy Renovables at €105.0 is still good value after a strong run, looking closely at what the current price implies about the business can help you frame that decision.
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The share price has seen mixed short term moves, with a 4.7% decline over the last week, a 13.4% gain over the past month, a 24.0% gain year to date, and a 193.3% return over the last year, while the 3 year and 5 year returns sit at 279.6% and 209.7% respectively.
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Recent coverage has focused on Grenergy Renovables as a listed renewables developer and operator, with investors paying close attention to how its project pipeline and funding access might shape future cash flows. That context helps explain why the share price has been so active, as the market reacts to changing views on how robust and repeatable those cash flows could be.
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Despite this share price performance, our valuation model currently gives Grenergy Renovables a 0 out of 6 valuation score. Next, we look at how traditional approaches such as discounted cash flow, peer multiples, and asset based measures line up, before finishing with a broader framework that can help you make sense of valuation in a more complete way.
Grenergy Renovables scores just 0/6 on our valuation checks. See what other red flags we found in the full valuation breakdown .
Approach 1: Grenergy Renovables Discounted Cash Flow (DCF) Analysis
A Discounted Cash Flow, or DCF, model takes forecasts of a company's future cash flows and discounts them back to today using a required rate of return, to estimate what the business might be worth per share right now.
For Grenergy Renovables, the model used is a 2 Stage Free Cash Flow to Equity approach. The latest twelve month free cash flow is a loss of €801.42m, so the starting point is clearly negative. Analysts provide free cash flow estimates out to 2028, with Simply Wall St extrapolating further to 2035. Within this, free cash flow is projected at €80m in 2028, and then gradually higher through the ten year projection period.
After discounting these projected cash flows in €, the model arrives at an estimated intrinsic value of about €23.94 per share. Compared with a current share price of €105.0, the implied gap is very large, with the DCF indicating the stock is around 338.6% above this estimate. On this method alone, this points to a rich valuation.
Result: OVERVALUED
Our Discounted Cash Flow (DCF) analysis suggests Grenergy Renovables may be overvalued by 338.6%. Discover 225 high quality undervalued stocks or create your own screener to find better value opportunities.
Approach 2: Grenergy Renovables Price vs Earnings
For companies that are generating earnings, the P/E ratio is a straightforward way to see how much you are paying for each euro of profit. Investors usually accept a higher P/E when they expect stronger growth or see the earnings as relatively resilient, and a lower P/E when growth is more modest or risks feel higher.
Grenergy Renovables currently trades on a P/E of 33.87x. That sits above the Renewable Energy industry average P/E of 17.10x and also above the peer group average of 19.26x. In other words, the market is assigning the shares a higher earnings multiple than these broad comparators.
Simply Wall St also provides a Fair Ratio of 27.40x. This is a proprietary P/E level that reflects factors such as the company's earnings growth profile, industry, profit margins, market cap and specific risks, rather than relying only on simple industry or peer averages. Because it adjusts for these extra elements, it can be a more tailored yardstick than a basic peer comparison.
Comparing the Fair Ratio of 27.40x with the actual P/E of 33.87x, the shares currently sit above this fair range, which points to an OVERVALUED reading on this measure.
Result: OVERVALUED
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Upgrade Your Decision Making: Choose your Grenergy Renovables Narrative
Earlier we mentioned that there is an even better way to understand valuation. Let us introduce you to Narratives, a simple way for you to write the story behind your numbers by linking your view of Grenergy Renovables to specific forecasts for revenue, earnings and margins. You can then connect that to a Fair Value, which you can compare with today's price on Simply Wall St's Community page. Narratives for this stock already range from a more cautious view with a Fair Value around €72.0 to a more optimistic view around €100.0, and automatically refresh as new earnings, news or other data come in. This can help you decide whether the gap between your Fair Value and the current share price looks wide enough to consider buying, holding or selling.
Do you think there's more to the story for Grenergy Renovables? 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 GRE.MC .
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com
