Could Siemens Healthineers Shares Be Poised for Growth After Q2 Earnings Beat Expectations?

If you’ve ever wondered whether now is the right moment to buy, hold, or move on from Siemens Healthineers stock, you’re not alone. With markets shifting and healthcare innovation in the spotlight, investors are eyeing this major player closely for good reason. After all, the stock has shown some promising recent movement, climbing 4.6% in just the last week and edging out a modest 1.4% gain over the past month. Yet, if you zoom out, this year has tested patience, with the share price still down 8.4% since January and off by 8.8% over the last year. For those who have held on longer, however, the story is different. A strong 38.1% return over five years hints at a company that rewards conviction and time in the market.

Much of this recent change in sentiment can be attributed to evolving conditions in global healthcare delivery and technology adoption. As the world adapts to new medical and diagnostic needs, Siemens Healthineers has found itself in a stronger position, with its strengths becoming more pronounced relative to competitors.

But the real question on most investors’ minds is, given these swings, what is a fair price for the stock? By running Siemens Healthineers through six key valuation checks, the company impresses and scores a 5 out of 6. This result suggests it is undervalued in several ways. Here is a breakdown of what these numbers mean using the main valuation tools at every investor’s disposal. In addition, we will take a look at an even more insightful way to judge value that many investors overlook.

Siemens Healthineers delivered -8.8% returns over the last year. See how this stacks up to the rest of the Medical Equipment industry.

Approach 1: Siemens Healthineers Discounted Cash Flow (DCF) Analysis

The Discounted Cash Flow (DCF) valuation is a forward-looking model that estimates a company’s intrinsic value by projecting its future cash flows and discounting them back to today’s terms. This method helps investors understand what the stock is realistically worth right now, based on expected business performance.

For Siemens Healthineers, the current Free Cash Flow stands at €3.0 Billion. Analyst estimates project steady growth, with Free Cash Flow expected to reach €4.6 Billion by 2029. Projections are available for the next five years from analysts; longer-term estimates are extrapolated using models from Simply Wall St. This approach considers both the company’s recent performance and future expectations.

Based on these cash flow projections and the two-stage Free Cash Flow to Equity model, Siemens Healthineers has a calculated intrinsic value of €113.78 per share. This price suggests that the stock is currently trading at a 58.8% discount to its fair value, indicating it could be significantly undervalued on this measure.

Result: UNDERVALUED

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

Our Discounted Cash Flow (DCF) analysis suggests Siemens Healthineers is undervalued by 58.8%. Track this in your watchlist or portfolio, or discover more undervalued stocks.

Approach 2: Siemens Healthineers Price vs Earnings

The Price-to-Earnings (PE) ratio is a commonly used measure for valuing profitable companies because it shows how much investors are willing to pay for each euro of earnings. For businesses like Siemens Healthineers with proven profitability, the PE ratio helps investors quickly gauge whether the market views those earnings as reliable and likely to grow.

What makes a “fair” PE ratio can shift depending on factors such as earnings growth, profitability, and risk. Fast-growing and lower-risk companies tend to attract higher multiples, while more mature or volatile businesses may command less. That is why comparing Siemens Healthineers’ current PE ratio of 24.0x against other benchmarks is helpful.

At 24.0x, Siemens Healthineers trades below the Medical Equipment industry average of 28.3x and is slightly higher than the peer average of 22.5x. However, Simply Wall St’s proprietary “Fair Ratio” takes the analysis further. This metric calculates a justified PE for Siemens Healthineers based on its specific growth rates, profit margins, market cap, and unique risks, which in this case is 30.6x. Unlike simple comparisons to industry or peers, the Fair Ratio tailors its assessment to the company’s complete context.

Since the Fair Ratio (30.6x) is well above the current multiple (24.0x), this suggests Siemens Healthineers is undervalued by this measure.

Result: UNDERVALUED

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 Siemens Healthineers Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let’s introduce you to Narratives. A Narrative is your personal story or perspective about a company, tying together your expectations for its business future, including revenue, earnings, and profit margins, and translating these into a fair value for the stock.

Narratives give context to the numbers; instead of just relying on static metrics, they let you express why you expect Siemens Healthineers to do well (or poorly) and link those expectations to financial forecasts and estimated share value. On Simply Wall St’s Community page, millions of investors use Narratives to shape their buy and sell decisions, comparing the Fair Value from their Narrative to the current market price.

Best of all, Narratives are dynamic. They automatically update as new news, earnings, or market events unfold, ensuring your valuation view stays fresh. For example, some Siemens Healthineers investors believe growth in AI diagnostics and recurring revenues will drive earnings above €3.2 billion and set a fair value of €65.0 per share. Others are more cautious, factoring in China market risks and targeting a fair value as low as €50.0. Which story fits your outlook?

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