Assessing Macquarie Group (ASX:MQG)’s Valuation After Recent Share Price Weakness

Macquarie Group (ASX:MQG) has been drifting after a mixed few months, with the stock sliding about 11% over the past 3 months even as annual revenue and net income both continued to grow.

See our latest analysis for Macquarie Group.

Zooming out, the picture is more balanced, with the recent 11.2% 3 month share price pullback sitting against a 1 year total shareholder return of minus 8.9%, but a solid 5 year total shareholder return of 68.4%. This suggests long term momentum is still intact even as sentiment cools near A$197.60.

If Macquarie’s recent moves have you rethinking where the real growth stories might be, this could be a good moment to explore fast growing stocks with high insider ownership.

With analysts seeing upside to A$224.87 while Macquarie continues to grow revenue and profits, investors now face a key question: is the current share price a hidden entry point or already factoring in its future growth?

Most Popular Narrative: 12% Undervalued

With Macquarie last closing at A$197.60 versus a narrative fair value of about A$224.48, the valuation argument leans in favour of patient optimists.

The business is positioned to benefit from potential performance fees and asset realization gains in key investment areas like data centers and green energy projects, potentially impacting earnings growth and improving return on equity as these assets mature.

Read the complete narrative.

Curious how steady but unspectacular growth assumptions can still back a higher valuation? The narrative leans on disciplined margins, maturing assets and a punchy future earnings multiple. Want to see exactly how those moving parts combine into that fair value call?

Result: Fair Value of $224.48 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, this hinges on execution, with competitive margin pressure and lower commodities client activity both capable of extending the earnings trough and undermining recovery hopes.

Find out about the key risks to this Macquarie Group narrative.

Another Angle on Value

Not everyone agrees Macquarie is cheap. Our SWS DCF model, which projects future cash flows and discounts them back, suggests fair value closer to A$153.20. This implies the shares might actually be overvalued at current levels. Which story do you trust more, cash flows or consensus?

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

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Macquarie Group for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 913 undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own Macquarie Group Narrative

If this perspective does not quite match your own, or you would rather dig into the numbers yourself, you can shape a custom view in minutes: Do it your way.

A great starting point for your Macquarie Group research is our analysis highlighting 4 key rewards and 3 important warning signs that could impact your investment decision.

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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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