Should Investors Rethink Oberbank After Its 91% Five Year Surge in 2025?

Wondering what to do with Oberbank stock after its steady climb? You are not alone. Investors are keeping a close eye on this Austrian lender as its share price continues to tell an interesting story. Over the past week, Oberbank has eked out a 0.3% gain, but it is the longer-term moves that really turn heads: up 7.7% year-to-date, a healthy 9.2% over the past 12 months, and an impressive 91.4% gain across five years. That kind of track record puts Oberbank among the standout performers in its sector. Some of these moves reflect broader market trends, including renewed confidence in European financials and increased investor appetite for banks with stable regional footprints.

But is Oberbank’s stock still trading at a bargain, or has recent optimism pushed it above fair value? Our valuation checks offer a mixed picture, assigning the company a score of 1 out of 6 for being undervalued across different assessment criteria. That means Oberbank only ticks the box on one major undervaluation metric, a detail worth keeping in mind as you make your decision.

Next, let’s dig into the main valuation approaches to see where Oberbank stands according to the numbers. If you are looking for a smarter, more holistic way to value the company, stay tuned for a fresh angle at the end of this analysis.

Oberbank scores just 1/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.

Approach 1: Oberbank Excess Returns Analysis

The Excess Returns model evaluates whether a company's returns on invested capital surpass the cost of equity, providing insight into potential value creation for shareholders. With Oberbank, this approach examines key factors including its book value per share, sustainable earnings, and recent return on equity trends.

Oberbank’s most recent average Return on Equity is 9.23%, built on a stable book value of €54.29 per share (based on the median from the past five years), and a stable EPS of €5.01 per share. The cost of equity is estimated at €3.80 per share, meaning the company achieves an excess return of €1.21 per share. This suggests that Oberbank is operating efficiently and generating value over its cost of capital.

Using these inputs, the Excess Returns valuation pegs Oberbank's intrinsic value at approximately 3.1% above its current market price. In practical terms, this indicates the stock appears to be trading close to its fair value, neither a major bargain nor notably overpriced at this time.

Result: ABOUT RIGHT

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Oberbank.

Simply Wall St performs a valuation analysis on every stock in the world every day (check out Oberbank's valuation analysis). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes.

Approach 2: Oberbank Price vs Earnings

Price-to-Earnings (PE) is a widely used valuation measure for profitable companies like Oberbank because it directly reflects how much investors are willing to pay for each euro of the bank's reported earnings. A higher PE ratio often signals expectations of stronger growth or lower risk in the future, while a lower PE can indicate either undervaluation or higher perceived risks. Ultimately, what’s considered a “fair” PE ratio depends not only on a company’s historic performance but also on its growth prospects and the risk environment in which it operates.

Currently, Oberbank trades at a PE ratio of 14.89x. This is above both the average for its peer group, which sits at 12.90x, and the wider banks industry average of 10.44x. At first glance, this premium might suggest the stock is a bit expensive relative to its sector.

However, Simply Wall St's proprietary “Fair Ratio” goes further than a simple comparison. It incorporates not only the company’s peer group and industry, but also expansion prospects, profitability, risk, and even market cap. This approach produces a more contextual and nuanced benchmark tailored for Oberbank’s specific profile, making it a better yardstick for determining value than peer or industry averages alone.

In Oberbank’s case, the Fair Ratio is not materially different from its current PE, indicating that the market price fits with the company's fundamentals, risks, and returns. This suggests investors are pricing Oberbank about right for its prospects and financial profile.

Result: ABOUT RIGHT

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Oberbank Narrative

Earlier we mentioned that there's an even better way to understand valuation, so let's introduce you to Narratives. A Narrative is your personal investment storyline, offering a chance to connect your perspective on Oberbank to its numbers by forecasting future revenue, earnings, and margins, all of which lead to an estimated fair value. Narratives allow you to link Oberbank's story, whether it's focused on growth, stability, or risk, directly to a financial forecast and an actionable value estimate.

This tool, easily accessible on Simply Wall St's Community page and trusted by millions of investors, puts these insights front and center. Narratives help you decide when to buy or sell by comparing your Fair Value to the current market price, while automatically updating your forecasts as new news or company results roll in. For example, some investors may believe Oberbank is worth far more than today’s price due to anticipated earnings growth, while others might see limited upside based on more cautious estimates. Narratives make it easy to see both sides, empowering you to invest with conviction based on the story you believe in.

Do you think there's more to the story for Oberbank? Create your own Narrative to let the Community know!

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com