Assessing Theon International (ENXTAM:THEON) Valuation After a Year of Powerful Share Price Gains

Theon International (ENXTAM:THEON) has quietly delivered a strong run this year, with the stock nearly doubling over the past 12 months, prompting investors to ask whether the current valuation still looks reasonable.

See our latest analysis for Theon International.

With the latest share price sitting at $32.0 and a powerful year to date share price return of 142.42 percent plus a one year total shareholder return of 197.36 percent, momentum clearly looks to be building as investors reassess Theon International’s growth prospects and risk profile.

If Theon’s surge has you thinking about what else could be gaining traction in defense and security hardware, it might be worth exploring aerospace and defense stocks as your next stop.

With earnings still growing solidly and the shares trading only modestly below analyst targets, the key question now is whether Theon International remains undervalued or if the market is already pricing in its future growth.

Price to Earnings of 30.8x: Is it justified?

On a price to earnings basis, Theon International’s last close at €32 implies a 30.8x multiple, putting the shares slightly on the expensive side versus peers and fair value estimates.

The price to earnings ratio compares the current share price to the company’s earnings per share. It is a core yardstick for valuing profitable defense and aerospace businesses, where earnings power and contract visibility matter.

At 30.8x, investors are paying a premium not only to the peer average of 17.1x and the European Aerospace and Defense industry at 30.7x, but also to the SWS estimated fair price to earnings ratio of 24.4x.

Result: Price to earnings of 30.8x (OVERVALUED)

Explore the SWS fair ratio for Theon International

However, risks remain, including potential delays or cancellations of defense contracts and any setback to its impressive double digit revenue and earnings growth trajectory.

Find out about the key risks to this Theon International narrative.

Another lens on value

While the current price to earnings ratio of 30.8x looks rich compared to peers and the fair ratio of 24.4x, our DCF model paints a calmer picture. It suggests Theon trades only about 1.6 percent below fair value, which appears more like fairly priced than clearly overvalued.

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 Theon International 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 902 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 Theon International Narrative

If you would rather challenge these conclusions and build your own evidence based view from the ground up, you can craft a personalized narrative in minutes with Do it your way.

A great starting point for your Theon International research is our analysis highlighting 3 key rewards and 2 important warning signs 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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