Delta Galil Industries (TASE:DELG) Valuation in Focus After Q3 Earnings Growth and Dividend Announcement

Delta Galil Industries (TASE:DELG) just released its third quarter 2025 financial results, revealing an uptick in sales compared to last year while net income dipped slightly. After the report, the company also announced a quarterly dividend.

See our latest analysis for Delta Galil Industries.

After this quarter’s earnings release and dividend announcement, Delta Galil Industries’ shares faced some pressure in the short term, with a 1-year total shareholder return of -0.7%. Its five-year total return of 186% tells a much more resilient long-term story. Despite some near-term volatility, momentum seems to be steadying as investors digest the latest updates and continue to weigh growth prospects against risks.

If you’re watching how shareholder returns play out after earnings and payouts, now’s a smart moment to broaden your search and discover fast growing stocks with high insider ownership

With shares drifting despite solid top-line growth and a reliable dividend payout, investors may wonder whether Delta Galil Industries is now trading below its true worth or if the market has already factored in all the potential upside.

Price-to-Earnings of 16.9x: Is it justified?

Delta Galil Industries currently trades at a price-to-earnings ratio of 16.9x, notably lower than the average ratios of both its local and regional Luxury sector peers, which stand at 17.4x and 39.4x respectively. With a last close of ₪183, this valuation places Delta Galil on the more attractive end of the spectrum for profitability-based multiples in its industry.

The price-to-earnings (P/E) ratio is a widely used measure for comparing a company's current share price to its per-share earnings. It provides a snapshot of the market's expectations around the company's growth and profitability. For a diversified manufacturer like Delta Galil, a competitive P/E can highlight how the market values its current earnings power versus future prospects.

A lower than average P/E ratio may suggest the market is not fully pricing in Delta Galil's earnings potential or could be discounting near-term headwinds. Since multiples can quickly adjust as sentiment shifts, this figure provides important perspective for investors watching relative valuations within the sector.

Delta Galil's 16.9x price-to-earnings multiple is below its peer average of 39.4x, and also below the Asian Luxury industry average of 17.4x. This reinforces the idea that shares may not be fully valued based on near-term profitability alone.

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

Result: Price-to-Earnings of 16.9x (UNDERVALUED)

However, risks remain, including further short-term volatility and the possibility that current profit levels may not fully reflect future market challenges.

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

Another View: Discounted Cash Flow Model Tells a Different Story

While the earnings multiple suggests Delta Galil may be undervalued, our SWS DCF model provides a contrasting perspective. According to this approach, the company's shares trade well above our estimate of fair value at ₪46.41, making them appear overvalued by this metric. Could the market be too optimistic about future cash flows?

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 917 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 approach the data from your own angle, you can build and share your perspective 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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