A Look at Fairfax Financial (TSX:FFH) Valuation After Strong Earnings Growth and Share Buybacks

Fairfax Financial Holdings (TSX:FFH) just released its third quarter results, posting a sharp increase in net income and earnings per share compared to last year. The company also increased share buybacks, signaling ongoing confidence from management.

See our latest analysis for Fairfax Financial Holdings.

Fairfax’s latest results land after a year of notable gains, with strong third quarter profits and sizable buybacks fueling renewed optimism around the stock. The share price sits at $2291.84. Momentum has steadily built in 2025, pushing the year-to-date share price return to 15.9%. This has boosted total shareholder return to nearly 21% over the past year. Looking further out, Fairfax’s long-term track record is even more impressive. The three-year total shareholder return tops 220%, pointing to meaningful value creation for persistent holders.

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But with this run-up and a strong track record behind it, is Fairfax trading at an attractive entry point, or are all future gains already reflected in the share price? This leaves investors to wonder if there is still a buying opportunity.

Most Popular Narrative: 15.4% Undervalued

Fairfax Financial Holdings trades well below the narrative’s estimated fair value, suggesting room for upside versus the last close. The stage is set for analyst assumptions and capital allocation choices to play a big role in future returns.

The market may be overestimating the sustainability of Fairfax's elevated net investment income, as current results are heavily boosted by high interest rates and strong gains on fixed income portfolios. If global rates moderate or decline, this tailwind could reverse and materially lower net earnings.

Read the complete narrative.

Want a peek behind the curtain? The narrative’s foundation relies on an optimistic mix of steady returns and shifting profit margins. Which bold projections justify this valuation? If you crave the real engine driving Fairfax’s fair value, the full narrative uncovers every assumption and expectation at work.

Result: Fair Value of $2,707.92 (UNDERVALUED)

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

However, persistent strong investment income or faster than expected premium growth in key international markets could quickly shift Fairfax’s outlook and challenge the prevailing narrative.

Find out about the key risks to this Fairfax Financial Holdings narrative.

Build Your Own Fairfax Financial Holdings Narrative

If you want to dig into the numbers from your own angle or test a different thesis, shaping your own narrative only takes a few minutes, so why not Do it your way

A great starting point for your Fairfax Financial Holdings research is our analysis highlighting 3 key rewards and 2 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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