Assessing Nokian Tyres (HLSE:TYRES) Valuation Following Recent Share Price Momentum

Nokian Renkaat Oyj (HLSE:TYRES) shares have moved higher over the past week, catching the eye of investors curious about what has driven the recent activity. The stock’s performance over the past month has shown a steady climb, prompting questions about the company’s valuation and what could be next.

See our latest analysis for Nokian Renkaat Oyj.

Momentum appears to be building for Nokian Renkaat Oyj, with the stock's recent climb aligning with a moderate 1-year total shareholder return. This signals early signs of renewed investor confidence. While the past remains challenging, this uptick suggests sentiment may be shifting as investors reassess valuation and growth prospects.

If Nokian's recent move has you interested in broader trends, now could be a smart time to discover See the full list for free.

With the recent gains and renewed buzz, investors are left to wonder if Nokian Renkaat Oyj is trading at a bargain or if the market is already anticipating the company's next chapter of growth.

Price-to-Sales of 0.8x: Is it justified?

With Nokian Renkaat Oyj trading at a price-to-sales (P/S) ratio of 0.8x, the stock sits notably above the European Auto Components industry average of 0.3x. The last close price of €8.05 therefore reflects a valuation premium relative to many sector peers.

The price-to-sales multiple measures how much investors are willing to pay for each euro of sales the company generates. For the Auto Components sector, where companies often face cyclical earnings and margin pressures, a lower multiple is typically the norm.

On a relative basis, Nokian Renkaat appears expensive compared to the wider industry. This suggests that the market is currently assigning higher growth expectations or strategic value to the business despite near-term profitability challenges. However, when compared with its direct peers, where the average P/S is 0.9x, the stock offers slightly better value.

The market's higher valuation may not be fully justified given peer and industry standards. Investors should look closer at whether sustained growth or a turnaround could support such a premium going forward.

See what the numbers say about this price — find out in our valuation breakdown.

Result: Price-to-Sales of 0.8x (OVERVALUED)

However, persistent declines in long-term returns and recent negative net income may challenge renewed optimism if financial improvements do not materialize soon.

Find out about the key risks to this Nokian Renkaat Oyj narrative.

Another View: SWS DCF Model Suggests Upside

While the price-to-sales ratio points to Nokian Renkaat Oyj trading at a premium, our DCF model offers a striking contrast. The SWS DCF model estimates fair value for the stock at €35.16, which is well above the recent price. This suggests shares may actually be undervalued instead of expensive. Which view will the market trust going forward?

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 Nokian Renkaat Oyj 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 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 Nokian Renkaat Oyj Narrative

If you want to interpret the numbers differently or prefer to dig into the data yourself, you can assemble your own perspective in just a few minutes. Do it your way.

A great starting point for your Nokian Renkaat Oyj research is our analysis highlighting 2 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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