Assessing Delta Galil Industries (TASE:DELG) Valuation as Shares Gain 6% Over the Past Week

Delta Galil Industries (TASE:DELG) shares have edged higher recently, posting gains of 0.8% over the past day and 6% for the week. These moves come as investors assess the company’s latest performance and long-term fundamentals.

See our latest analysis for Delta Galil Industries.

Delta Galil Industries has seen a steady recovery, with recent share price gains reflecting renewed confidence among investors. Although the year-to-date share price return remains negative, the stock's strong one-year total shareholder return of 16% indicates that positive momentum is building in the broader context.

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With shares rebounding but long-term gains already significant, investors now face a crucial question: is Delta Galil Industries still undervalued, or has the market already factored in all of its future growth?

Price-to-Earnings of 16.7x: Is it justified?

Delta Galil Industries trades at a price-to-earnings (P/E) ratio of 16.7x, which looks attractive compared to both its peers and the wider industry given the last close price of ₪185. This level suggests the market may be pricing in a moderate outlook for future earnings compared to luxury sector competitors.

The price-to-earnings ratio is one of the most watched valuation tools, showing how much investors are willing to pay for each unit of net earnings. For a consumer durables company like Delta Galil Industries, it provides quick insight into market expectations and growth sentiment.

Delta Galil's P/E is notably below the peer group average of 42x and sits lower than the luxury industry average of 18.9x. This means investors are paying less for its earnings relative to competitors, hinting at either a conservative market outlook or untapped potential for upward re-rating. In the absence of a calculated fair ratio, these discount levels could draw attention as the sector evolves.

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

Result: Price-to-Earnings of 16.7x (UNDERVALUED)

However, Delta Galil Industries faces potential risks if earnings growth stalls or if broader consumer demand weakens. These factors could weigh on future performance.

Find out about the key risks to this Delta Galil Industries narrative.

Another View: Discounted Cash Flow Model

While the market’s price-to-earnings approach suggests Delta Galil Industries may be undervalued, our SWS DCF model presents a different perspective. It estimates a fair value of ₪100.29 per share, which indicates that the current market price of ₪185 could be overvalued. This raises the question of whether optimism has outpaced fundamentals, or if the market is considering factors that are not reflected in the numbers.

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 Delta Galil Industries 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 Delta Galil Industries Narrative

If you think there’s more to the story, or want to dig into the numbers yourself, it’s easy to build your own view in just a few minutes. Do it your way

A great starting point for your Delta Galil Industries research is our analysis highlighting 1 key reward and 1 important warning sign 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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