Does the Recent Atos Share Price Surge Signal a True Turnaround in 2025?

If you’re trying to decide what to do with Atos stock right now, you’re not alone. After a turbulent few years, Atos is suddenly back on the radar of value-focused investors. The company’s share price has shot up an impressive 16.4% over the past month and soared by more than 100% since the start of the year. That kind of move naturally sparks some strong opinions. Is this the start of a real turnaround, or just a temporary bounce?

In the short term, Atos has been buoyed by shifting market sentiment and a few encouraging developments that hint at a possible change in risk perception around the company. The recent uptick stands in stark contrast to the long-term chart, where the stock is still down roughly 92% over three years and nearly 99% from five years ago. Even with this year’s rally, long-term holders are likely still cautious, and it’s fair to ask whether the current price actually reflects the true value of the business.

That’s where valuation checks come into play. By our count, Atos scores a 5 out of 6 on our standard set of value metrics, signaling potential undervaluation across most criteria we track. Of course, numbers alone don’t always tell the whole story. Next, let’s break down the different ways analysts look at value. Later on, I’ll share what could be an even more insightful approach to understanding whether Atos really belongs in your portfolio.

Why Atos is lagging behind its peers

Approach 1: Atos Discounted Cash Flow (DCF) Analysis

The Discounted Cash Flow (DCF) model estimates a company's true worth by projecting its future cash flows and discounting them back to today’s value. This approach helps investors look beyond current market emotions and focus on the long-term fundamentals of a business.

In Atos’ case, the DCF is based on a two-stage Free Cash Flow to Equity model. The company’s last twelve months’ free cash flow was -€213.4 Million, indicating recent headwinds. However, analysts expect a meaningful turnaround, projecting free cash flow to grow from around -€113 Million in 2026 to €743.6 Million by 2035. Notably, only the first five years reflect analyst estimates. Simply Wall St extrapolates values further out. All cash flows are presented in euros.

Based on these projections, the DCF model estimates Atos’ fair value at €196.15 per share. With the current share price trading at a 72.8% discount to this intrinsic value, the stock appears significantly undervalued according to this methodology.

Result: UNDERVALUED

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

Our Discounted Cash Flow (DCF) analysis suggests Atos is undervalued by 72.8%. Track this in your watchlist or portfolio, or discover more undervalued stocks.

Approach 2: Atos Price vs Earnings (PE Ratio)

The Price-to-Earnings (PE) ratio is one of the most widely used valuation multiples, especially for companies with a track record of profitability. It’s a straightforward way to gauge how much investors are willing to pay for a euro of the company’s earnings, making it particularly relevant for those assessing Atos now that the company may be turning a corner.

Deciding what constitutes a “normal” or “fair” PE ratio depends on several factors, including expected earnings growth, company-specific risks, and prevailing conditions in both the market and the industry. The higher the expected growth and stability, the more investors may be willing to pay. In contrast, higher risk typically justifies a lower multiple.

Currently, Atos trades at a PE ratio of just 0.7x. This is dramatically lower than the IT industry average of 21.85x and the average of its peers at 16.61x. At first glance, that could suggest a huge bargain. However, it’s important to look beyond these simple comparisons.

The Simply Wall St “Fair Ratio” provides a more nuanced benchmark, as it factors in Atos' growth prospects, risks, profit margins, and market size, not just a raw industry or peer group average. For Atos, the Fair Ratio comes in at 4.9x. This tailored metric is a better barometer of what the company should trade at under current conditions.

With Atos’ actual PE ratio of 0.7x well below the Fair Ratio, the stock looks significantly undervalued on this metric alone.

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 Atos Narrative

Earlier, we mentioned there's an even better way to understand valuation, so let's introduce you to Narratives. A Narrative is your unique perspective. It is essentially the story you see behind Atos' numbers, including your fair value estimate and forecasts for future revenue, earnings, and margins. Instead of focusing only on static data, Narratives connect your view of the company's story directly to a financial forecast and resulting fair value, making the investment process both more personal and transparent.

Narratives are an easy and accessible tool available on Simply Wall St's Community page, where millions of investors share and compare their perspectives. This feature helps you decide when to buy or sell by comparing Fair Value to the current Price, and whenever new news or earnings reports come in, the underlying forecasts and fair values for Narratives update automatically. This helps keep your decisions as informed as possible.

For example, with Atos, some investors currently set a bullish Narrative, estimating a fair value up to €41.0, while others are more cautious and assign a fair value as low as €20.6. Narratives let you see these differences at a glance, helping you find a viewpoint that matches your own outlook or challenge your assumptions with input from the community.

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