Is Siemens Still Attractive After 25.9% Surge and Robust Cash Flow Growth in 2025?

If you have been eyeing Siemens stock lately and wondering whether now is the right time to buy, you are not alone. The company has made serious waves in the market, catching the attention of investors with a mix of steady performance and promising future potential. Over the past year, Siemens has delivered a sharp 48.8% total return, and the momentum has stayed strong so far this year with a 25.9% return year-to-date. Looking at the past five years, the stock has more than doubled, up 154.8% in total return, which speaks to both resilience and reward.

These gains have not gone unnoticed, and the market has responded to a string of positive developments. Enthusiasm around Siemens’s ongoing digital transformation, its focus on automation, and its solid growth in both revenue and net income (up around 5.8% year-over-year) have helped drive the stock higher. At the same time, changes in risk perception due to a strong backlog and high-quality earnings have played a role and lifted investor confidence during uncertain times.

Of course, the big question is where the stock stands in terms of value. Is Siemens getting too pricey, or does it still offer a cushion for future growth? According to our valuation checks, Siemens scores a 4 out of 6 on our value scoreboard, indicating the company is undervalued in four of six key metrics we track. That sounds compelling, but numbers rarely tell the whole story by themselves.

To understand what this all means for your investing decision, let us take a closer look at the main ways analysts assess Siemens’s valuation. Be sure to stay with us until the end, where we will share an even more insightful way to consider what makes a stock like Siemens truly undervalued or overpriced in the current market.

Siemens delivered 48.8% returns over the last year. See how this stacks up to the rest of the Industrials industry.

Approach 1: Siemens Cash Flows

A Discounted Cash Flow (DCF) model estimates the value of a company by projecting its future cash flows and discounting them back to their value today. This method helps investors assess what a business is really worth, independent of short-term market reactions.

At present, Siemens generates an impressive €10.6 billion in Free Cash Flow. Analysts project this figure to grow steadily over the coming years, reaching a forecasted €16.0 billion by 2035. Projections for interim years indicate a strong upward trend, with 2029 showing estimated annual free cash flow of €12.7 billion.

When these future cash flows are discounted back using a 2 Stage Free Cash Flow to Equity model, Siemens’s intrinsic value is calculated at €389 per share. This valuation suggests that the stock is currently 38.7% undervalued compared to its estimated fair value, which may indicate meaningful upside for long-term investors.

Result: UNDERVALUED

Our DCF analysis suggests Siemens is undervalued by 38.7%. Track this in your watchlist or portfolio, or discover more undervalued stocks based on DCF analysis.

Approach 2: Siemens Price vs Earnings

The Price-to-Earnings (PE) ratio is widely recognized as a key valuation measure for established, profitable companies like Siemens. It provides a snapshot of how much investors are willing to pay per euro of earnings, which makes it especially useful when a business has a record of consistent profits.

A "normal" or "fair" PE ratio is influenced by growth expectations and the perceived risks surrounding a company or its sector. Companies expected to grow faster, or with more stable earnings, typically command higher PE multiples, while firms facing greater uncertainties warrant lower ratios.

Siemens currently trades at a PE ratio of 23.5x. This is considerably higher than the Industrials sector average of 12.8x, but well below its peer average of 49.1x. According to Simply Wall St’s proprietary Fair Ratio model, which factors in specifics like Siemens's earnings growth, margins, and unique industry risks, Siemens's fair PE is calculated to be 29.7x.

With the current PE just below the fair value benchmark, the stock appears attractively valued on this metric. Siemens is not as cheap as the broad sector, but compared to both its peers and its own fundamentals, the market price does not look stretched.

Result: UNDERVALUED

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Upgrade Your Decision Making: Choose your Siemens Narrative

Beyond traditional metrics like PE ratios, Narratives offer a more powerful way to think about investing by connecting your view of a company’s story to a clear forecast of its financial future and ultimately to an estimated fair value.

A Narrative is simply your perspective on what a company is likely to achieve. It ties together all the facts, forecasts, and your assumptions about future revenue, earnings, and margins, making sense of the numbers in the context of real business events and trends.

With Narratives on the Simply Wall St platform, millions of investors can quickly build, compare, and adjust their stories for Siemens. This allows them to see how those perspectives translate into a fair value estimate and discover whether the current price lines up with expectations.

This approach is especially useful because Narratives are dynamically refreshed as new information such as quarterly earnings or industry news becomes available. Your decision-making can then evolve with the market.

• For example, some investors believe Siemens will trade up to €272 based on rapid growth in electrification and recurring revenues, while others see €185 as more realistic given macroeconomic risks and tougher competition.

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