How Does Phoenix Financial Stack Up After 108% Rally and New Lending Rules in 2025?

If you are wondering whether to stick with Phoenix Financial or to finally jump on board, you are not alone. After all, it is tough to ignore a stock that has soared 108.0% year-to-date and a jaw-dropping 841.8% over the last five years. Even with a recent dip of -5.4% over the past week and -2.7% over the last month, Phoenix Financial's long-term trajectory remains impressive. These moves have come as investors digest major shifts in the financial sector, including broader optimism about alternative lending and new regulatory clarity, both of which have changed how the market views risk for companies like Phoenix.

While headlines have focused on recent volatility, a lot of the discussion around Phoenix Financial now centers on one question: is the rally over, or does this stock still have room to fly? To answer that, a close look at valuation is essential. By the numbers, the company has a valuation score of 3 out of 6, which means it is considered undervalued by half of the key checks analysts use. That puts Phoenix Financial into a more intriguing gray area than the cheerleaders or the skeptics might want to admit.

Let us break down the valuation approaches behind that score. More importantly, here is a smarter way to judge whether Phoenix Financial is truly undervalued. You will want to see this before making your next move.

Phoenix Financial delivered 195.5% returns over the last year. See how this stacks up to the rest of the Insurance industry.

Approach 1: Phoenix Financial Excess Returns Analysis

The Excess Returns valuation model measures how efficiently Phoenix Financial turns its equity into profits above its cost of capital. This approach looks for consistent value creation after factoring in the company’s average cost of equity, a vital benchmark for any financial firm.

Based on the latest data, Phoenix Financial posts a Book Value of ₪48.51 per share and a stable EPS of ₪6.56 per share, calculated using the median Return on Equity from the past five years. Its average Return on Equity stands at a strong 15.75%, well above the cost of equity at ₪3.44 per share. The resulting excess return, which is what is left after covering its equity cost, is ₪3.13 per share. This suggests the business is generating value for investors over and above what alternative capital investments might yield. The Stable Book Value, again derived from five-year medians, is set at ₪41.68 per share.

Despite these strong figures, the Excess Returns valuation implies Phoenix Financial’s shares trade 10.6% above intrinsic value, signaling mild overvaluation.

Result: OVERVALUED

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

Our Excess Returns analysis suggests Phoenix Financial may be overvalued by 10.6%. Find undervalued stocks or create your own screener to find better value opportunities.

Approach 2: Phoenix Financial Price vs Earnings

The Price-to-Earnings (PE) ratio is particularly useful for valuing profitable companies like Phoenix Financial, as it shows how much investors are willing to pay for each unit of current earnings. It is a straightforward way to compare profitability across companies and industries, especially when steady profits are being generated.

Growth and risk play major roles in determining what counts as a "normal" PE ratio. Fast-growing firms can often support higher PE multiples, while companies with higher risks, such as those exposed to volatile markets or uncertain regulation, typically trade at lower multiples. Industry benchmarks help set expectations, but the nuances of each business matter too.

Currently, Phoenix Financial trades at a PE ratio of 11.7x. This is below both its industry average of 12.2x and its peer group average of 13.7x. While these figures are a useful starting point, Simply Wall St's proprietary Fair Ratio offers a more tailored perspective. The Fair Ratio, which stands at 12.5x for Phoenix Financial, weighs earnings growth, profit margins, risk profile, industry dynamics, and market capitalization, delivering a sharper take on what the company’s valuation should be.

This analysis shows Phoenix Financial’s current PE is nearly in line with its calculated Fair Ratio, with a difference of less than 0.1x. That means the stock's valuation appears balanced and is neither stretched nor deeply discounted in the current context.

Result: ABOUT RIGHT

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 Phoenix Financial Narrative

Earlier we mentioned there is an even better way to understand valuation, so let us introduce you to Narratives. A Narrative is your personal story that connects Phoenix Financial’s business reality to your financial expectations and fair value estimate, turning numbers into a clear investment thesis. Instead of relying only on traditional models, Narratives help you map out your own forecast for future revenue, profit margins, and what you think the company should be worth, all in relation to its current share price.

Narratives are simple and accessible tools available on Simply Wall St’s Community page, used by millions of investors. These narratives give you context by allowing you to compare your calculated fair value to the latest share price, helping you decide when to buy, hold, or sell. Even better, Narratives are dynamic. Whenever new earnings or company news comes in, your story and its numbers update automatically.

For Phoenix Financial, one investor’s Narrative might see it as worth far more than its market price due to expected growth, while another may flag it as overvalued because of perceived risks. Both stories are visible, letting you weigh other perspectives before making your own decision.

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