Does Palfinger’s 76% Rally in 2025 Signal More Room for Growth?

If you're standing at the crossroads, wondering whether Palfinger stock deserves a place in your portfolio, you're not alone. The company's recent share price journey has been a wild ride that has featured both sharp accelerations and occasional pauses. Over the last year, Palfinger has delivered an impressive 76.1% return, and if you've held on for the past three years, you've seen your investment more than double with a 107.5% gain. Even in just the past week, the stock notched a 2.6% rise, though the past month brought a slight retreat of 1.6%.

Much of this upward momentum can be traced back to broader shifts in industrial demand and the company's ongoing adaptation to new markets and technologies. Investor sentiment has also been lifted as global supply chain conditions normalize, underscoring renewed confidence in established manufacturers like Palfinger. The year-to-date return of 83.6% reflects how perceptions of risk versus opportunity have tilted in favor of growth.

But let’s not stop at price charts alone. What really matters is whether the stock is undervalued, fairly priced, or rising on wishful thinking. Here’s a hint: Palfinger’s value score stands at a perfect 6, indicating the company is undervalued in every one of the six key financial checks. In the next section, we’ll break down what these valuation methods reveal, and stay tuned for an even more insightful way to look at Palfinger’s worth that we’ll explore by the end of the article.

Palfinger delivered 76.1% returns over the last year. See how this stacks up to the rest of the Machinery industry.

Approach 1: Palfinger Discounted Cash Flow (DCF) Analysis

The Discounted Cash Flow (DCF) model estimates a company's intrinsic value by projecting its future cash flows and then discounting those figures back to today's value. This allows investors to see what the business is fundamentally worth, independent of market swings and sentiment.

Palfinger currently generates a Free Cash Flow (FCF) of €101.72 Million. According to current analyst estimates, this figure is expected to steadily grow. Over the next five years, the FCF is projected to reach €203 Million by the end of 2029, with further growth extrapolated based on historical performance and realistic expectations. Simply Wall St projects FCF to continue rising each year through 2035, relying on a blend of analyst forecasts (out to 2029) and conservative extrapolation thereafter.

By discounting all projected FCFs back to today using an appropriate rate, the model calculates Palfinger's fair value at €86.06 per share. Compared to the current market price, this implies the stock is trading with a hefty discount. Specifically, it is 58.4% undervalued based on intrinsic value estimates.

For value-driven investors, these numbers paint a clear picture: Palfinger’s fundamentals may offer substantial upside relative to its current valuation.

Result: UNDERVALUED

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

Our Discounted Cash Flow (DCF) analysis suggests Palfinger is undervalued by 58.4%. Track this in your watchlist or portfolio, or discover more undervalued stocks.

Approach 2: Palfinger Price vs Earnings

The Price-to-Earnings (PE) ratio is a staple valuation metric for profitable companies like Palfinger, as it allows investors to assess how the market values each euro of the company's earnings. This approach is especially useful when a company has a solid track record of generating profits, making comparisons to peers and the broader industry straightforward.

Growth expectations and risk play a crucial role in what is considered a “normal” or “fair” PE ratio. Companies that are growing quickly, have stable earnings, or operate in less risky environments tend to command higher PE ratios. Those facing more uncertainty or limited growth prospects often trade at lower multiples.

Currently, Palfinger trades at a PE ratio of 16.5x. In context, the industry average for Machinery stocks stands at 24.4x, and close peers are priced at an average of 31.6x. While this might make Palfinger seem attractively priced, it is important to look beyond these surface comparisons.

The Simply Wall St Fair Ratio provides a more detailed benchmark based on factors such as earnings growth, industry dynamics, profit margins, company size, and underlying risks. For Palfinger, the Fair PE Ratio is calculated at 16.6x. This approach offers deeper insight than a simple industry or peer comparison, as it incorporates real company specifics and forward-looking risks rather than relying solely on broad averages or historical data.

In this case, Palfinger's current 16.5x PE ratio aligns almost exactly with its Fair Ratio of 16.6x, suggesting the stock is fairly valued based on its earnings profile and risk-adjusted outlook.

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 Palfinger Narrative

Earlier we mentioned there is an even better way to understand valuation, so let's introduce you to Narratives. A Narrative is a clear story that reflects your perspective on a company. It sits behind the numbers and links your view of Palfinger’s future revenue, profit margins, and fair value to what that actually means for your investment decision.

With Narratives, you do not need to be a financial professional to connect the dots. On Simply Wall St’s Community page, millions of investors use Narratives as an accessible tool to quickly map their own forecasts to a fair value and then compare that to today's share price. This makes it easier to decide whether it is time to buy, hold, or sell.

What makes Narratives especially powerful is that they update automatically as new information like company news or earnings is released, so your view always stays relevant. With Palfinger, for instance, some investors might have a bullish Narrative with a fair value of €50.0, while others might take a more cautious stance at just €38.5. This shows how different stories and assumptions can lead to different price targets.

Do you think there's more to the story for Palfinger? 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.

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