Is It Too Late to Consider Bombardier After a 1,760.8% Five Year Surge?

• If you are wondering whether Bombardier's huge run up has left it overpriced or if there is still value on the table, you are not alone. That is exactly what we are going to unpack here.
• The stock has climbed 0.8% over the last week, 15.3% in the last month, 138.1% year to date and an eye catching 1,760.8% over five years. This naturally raises questions about how much upside is left versus the risk you are now taking on.
• Recent headlines have focused on Bombardier's ongoing balance sheet clean up and strategy to focus squarely on business jets, a shift that has helped rebuild investor confidence and support the share price. At the same time, coverage around order momentum, backlog strength and progress on debt reduction has reinforced the idea that this is no longer the highly distressed Bombardier many investors remember.
• Despite the surge, Bombardier only scores 2 out of 6 on our valuation checks, suggesting it screens as undervalued on just a couple of fronts. Next, we will walk through what different valuation approaches are telling us and finish with a more holistic way to think about what the stock is really worth.

Bombardier scores just 2/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.

Approach 1: Bombardier Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow model estimates what a company is worth by projecting the cash it can generate in the future and discounting those cash flows back to today. For Bombardier, the model uses a 2 Stage Free Cash Flow to Equity approach based on its recent and expected cash generation.

Bombardier currently generates about $369.9 Million in free cash flow. Analyst forecasts, extended by Simply Wall St beyond the formal estimate horizon, see this rising to roughly $1.45 Billion by 2035. The key years between 2026 and 2030 show free cash flow gradually climbing from around $912.1 Million to over $1.25 Billion, before tapering into a more modest growth phase.

When all of these projected cash flows are discounted back, the model arrives at an intrinsic value of about $333.6 per share. That implies the shares trade at roughly a 31.0% discount to this estimate, which indicates that the market remains skeptical about the durability of Bombardier’s cash flow recovery.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Bombardier is undervalued by 31.0%. Track this in your watchlist or portfolio, or discover 916 more undervalued stocks based on cash flows.

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

Approach 2: Bombardier Price vs Earnings

For profitable companies like Bombardier, the price to earnings (PE) ratio is a useful way to gauge how much investors are willing to pay today for each dollar of current earnings. In general, faster growth and lower risk justify a higher PE, while slower or more volatile earnings usually deserve a lower multiple.

Bombardier currently trades on a PE of 39.35x. That sits below the Aerospace and Defense industry average of about 45.58x, but above the peer group average of roughly 27.97x, suggesting investors are already pricing in stronger prospects than many direct comparables. To go a step further, Simply Wall St uses a proprietary Fair Ratio, which estimates the PE a company should trade on after accounting for its earnings growth outlook, profitability, risk profile, size and industry.

Bombardier’s Fair Ratio is 37.63x, only slightly below the current 39.35x. Because this metric incorporates growth, risks, margins, market cap and industry dynamics, it offers a more tailored benchmark than broad peer or sector comparisons. On this basis, the shares look a touch expensive but not dramatically out of line with what the fundamentals justify.

Result: OVERVALUED

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1443 companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Bombardier Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives, a simple way to write the story you believe about Bombardier, link that story to a financial forecast and a fair value, and then see in one place whether the current price makes it a buy or a sell for you.

On Simply Wall St’s Community page, used by millions of investors, a Narrative lets you spell out how you think Bombardier’s revenue, earnings and margins will evolve, then automatically converts those assumptions into a dynamic fair value estimate that updates when new news, earnings or guidance arrive.

For example, a bullish Bombardier investor might build a Narrative that leans on strong aftermarket growth, defense orders and margin expansion to justify a fair value closer to about CA$217 per share. A more cautious investor might focus on business jet cyclicality, supply chain risks and delayed cash inflows to support a fair value nearer CA$120. By comparing each Narrative’s fair value to the live share price, both investors get a clear, numbers backed view of whether Bombardier looks worth buying, holding or selling based on their own view of the future, rather than relying on a single static PE multiple.

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

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