Should You Reconsider Atos Stock After Recent 8.9% Rally Amid Restructuring Headlines?

• Wondering if Atos stock is worth a closer look, especially after all the recent buzz? You are not alone. Figuring out real value in today’s market is top of mind for many investors.
• Atos has seen some wild swings lately, with shares climbing 8.9% this week, but still nursing steep longer-term declines. The stock is down 13.2% in the past month and 99.5% lower over the last year, despite an 84.0% gain year-to-date.
• These price shifts follow headlines about restructuring and ongoing negotiations with potential buyers for parts of the business, which have fueled renewed speculation and volatility. Industry chatter and media coverage suggest the market is digesting significant changes, as Atos explores strategic moves to reshape its core and unlock value.
• On the valuation front, Atos scores a solid 5 out of 6 on our undervaluation checks. This notable mark sets the stage for a deeper dive into what’s really driving this number. Stick with us as we unpack traditional and alternative valuation approaches, plus a fresh perspective you will not want to miss at the end of the article.

Find out why Atos's -99.5% return over the last year is lagging behind its peers.

Approach 1: Atos Discounted Cash Flow (DCF) Analysis

The Discounted Cash Flow (DCF) model works by projecting a company’s expected future cash flows and discounting them back to today’s value. This approach helps estimate what the company is truly worth based on its ability to generate future cash. This method is particularly useful in assessing companies undergoing significant change.

For Atos, the most recent Free Cash Flow (FCF) reported is negative, at -€213 million. However, analysts expect substantial improvement in the years ahead, with FCF turning positive by 2027 and projected to reach as much as €1 billion by 2035. Forecasts for the earlier years (through 2028) rely on analyst consensus. Projections beyond that are extrapolated to capture longer-term potential.

Using the 2 Stage Free Cash Flow to Equity model, this DCF analysis estimates Atos’s intrinsic fair value at €253.09 per share. With the current share price at a steep 81.8% discount to this value, the model suggests that Atos stock is deeply undervalued at today’s levels.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Atos is undervalued by 81.8%. Track this in your watchlist or portfolio, or discover 920 more undervalued stocks based on cash flows.

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

Approach 2: Atos Price vs Earnings

The price-to-earnings (PE) ratio is often favored when appraising profitable companies because it directly links a company's share price to its per-share earnings, reflecting how much investors are willing to pay for each euro of profit. A “fair” PE multiple typically depends on growth expectations and risk. Fast-growing, lower-risk companies tend to command higher PE ratios, while mature or riskier firms generally trade at lower multiples.

Atos currently trades at a PE ratio of just 0.60x. This stands in stark contrast not only to the IT industry average of 21.48x, but also to the company’s immediate peers, which average 18.70x. Such a low multiple may suggest the market is factoring in significant risk or low confidence in Atos’s future earnings prospects.

Simply Wall St’s proprietary “Fair Ratio” metric incorporates Atos’s specific earnings growth outlook, risk profile, profit margins, market cap, and its sector reality. Unlike simple comparisons against peers or industry averages, the Fair Ratio is tailored to the company’s unique characteristics, aiming for a more relevant and nuanced benchmark. For Atos, the Fair Ratio is calculated at 6.09x.

With Atos trading at 0.60x against a Fair Ratio of 6.09x, the shares appear to be trading well below what its fundamentals would justify, after accounting for all relevant risks and prospects.

Result: UNDERVALUED

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1443 companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Atos Narrative

Earlier we mentioned that there's an even better way to understand valuation, so let's introduce you to Narratives. A Narrative is a simple, powerful tool that lets you shape a forward-looking story for a company like Atos, tying your unique perspective on what will drive revenue, margins, and growth directly to a financial forecast and ultimately to an estimated fair value.

Available on the Simply Wall St platform’s Community page, Narratives make it easy for any investor to combine numbers with real-world events and market news. This allows you to compare your fair value to today’s price to decide when it could be time to buy or sell. Best of all, Narratives stay fresh as they update dynamically as new financials, news, or company announcements come in, keeping your outlook relevant without extra effort.

For example, one Atos Narrative might be shaped by recent cybersecurity contract wins and improved operating margins, leading to a fair value as high as €43.00. Another might focus on declining revenues and sector challenges, resulting in a much lower fair value of €20.60. The Narrative you choose guides your decision, letting you clearly see your reasoning and act with confidence, with no advanced finance background required.

Do you think there's more to the story for Atos? Head over to our Community to see what others are saying!

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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