Does the Latest OVS Rally Signal Further Growth After Strong Year-to-Date Performance?

If you are deciding what to do with OVS stock, you are in good company. OVS has made quite a statement over both the short and long term, climbing 1.6% in the last week, 8.6% across the past month, and logging a staggering 22.1% gain year-to-date. The longer you look back, the more impressive it gets: 55.3% over twelve months, and an incredible 192.3% over three years. If you had the patience to hold for five years, your position would now be up 437.7%. These returns would catch anyone's attention, but they also beg the question: is OVS still undervalued or are recent gains a sign that opportunity may be fading?

Market developments have certainly played a role in the stock’s recent momentum, with broader sector optimism lifting sentiment and reshaping risk perceptions. New trends in retail and shifting consumer habits have shined a spotlight on adaptable apparel companies like OVS, giving them a tailwind in both performance and investor confidence.

When it comes to valuation, things get interesting. OVS currently scores a 3 out of 6 on our valuation check, meaning the company appears undervalued by half the measures we consider. This sets the stage for a closer look at what these valuation methods actually reveal, and whether the numbers tell the whole story. Next, we will dive deeper into each approach, and at the end, I will share a perspective on valuation that goes beyond the usual ratios.

OVS delivered 55.3% returns over the last year. See how this stacks up to the rest of the Luxury industry.

Approach 1: OVS Discounted Cash Flow (DCF) Analysis

The Discounted Cash Flow (DCF) model works by forecasting a company’s future cash flows and then discounting them back to today’s value. This provides an estimate of what the business is truly worth. It is a way to look beyond short-term swings and focus on the company’s ability to generate actual money for shareholders over time.

For OVS, the most recent twelve months generated Free Cash Flow (FCF) of €199.67 million. According to analyst estimates, OVS’s FCF is expected to trend lower over time, with projections dropping to €84.8 million by 2028. Further out, Simply Wall St extrapolates a ten-year FCF forecast that dips slightly each year, with discounted cash flows ranging from €61.2 million in 2026 to just under €10 million in 2035.

After discounting these future figures, the model calculates an intrinsic value of €1.53 per share. By comparison, the current share price is significantly higher. The implied intrinsic discount from the DCF is -170.6%, meaning OVS stock appears dramatically overvalued based on this method.

Result: OVERVALUED

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

Our Discounted Cash Flow (DCF) analysis suggests OVS may be overvalued by 170.6%. Find undervalued stocks or create your own screener to find better value opportunities.

Approach 2: OVS Price vs Earnings (PE Ratio)

The Price-to-Earnings (PE) ratio is a go-to valuation measure for profitable companies because it connects a company’s share price with how much profit it actually generates. This makes the PE ratio especially useful for evaluating businesses like OVS that are steadily earning money, helping investors judge whether the current price reflects realistic growth prospects.

“Normal” or fair PE ratios depend heavily on two factors: how fast a company is expected to grow and the risks that might affect those future earnings. Higher growth typically justifies a higher PE, while greater risks or sluggish expansion drag that multiple down. In OVS’s case, the current PE ratio stands at 19.6x. This lines up closely with its industry average of 18.8x and is lower than the peer group average of 24.8x, suggesting OVS is not trading at any speculative premium compared to its sector and peers.

Simply Wall St’s proprietary “Fair Ratio” sharpens the picture further by blending a range of factors including growth forecasts, profit margins, company size, and industry trends. For OVS, the Fair Ratio is 19.9x. Unlike simple peer or industry averages, the Fair Ratio is designed to reflect what investors should realistically expect given the company’s unique fundamentals and outlook, resulting in a more objective and tailored benchmark.

With the actual PE ratio nearly identical to the Fair Ratio, OVS’s valuation appears well-balanced and about right for its current profile.

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 OVS Narrative

Earlier we mentioned that there's an even better way to understand valuation, so let's introduce you to Narratives. Narratives are your own perspective on OVS, how you see its future unfolding, translated into numbers like growth rates, margins, and, ultimately, a fair value based on your expectations.

Unlike static calculations, Narratives allow you to combine OVS’s story, what you believe will drive its next chapter, with a dynamic financial forecast so you can see how your outlook translates into a reasonable price for the stock right now. On Simply Wall St’s Community page, millions of investors use Narratives as an easy tool to compare their view of fair value against the current market price, adjusting their approach as fresh data or news emerges.

Because Narratives are always updated whenever new information arrives, they empower investors to quickly gauge whether it's time to buy, sell, or sit tight as circumstances change. For example, some OVS investors currently forecast that broad international expansion will boost earnings and justify a price target of €5.2, while others anticipate headwinds that cap the fair value closer to €4.2. This demonstrates how Narratives reflect not just numbers, but the real, evolving stories behind your investment decisions.

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