Is Prosus Still Attractive After 41% Jump and Ongoing Tech Sector Gains in 2025?

Thinking about what to do with Prosus stock? You are not alone. Many investors are looking at this tech giant and wondering whether to buy in, hold tight, or take some profits off the table. The stock has caught a lot of attention this year, and for good reason: since the start of 2024, Prosus has climbed an impressive 41.4 % in price, and it is up a staggering 69.7 % over the past year. In fact, look back three years and holders are sitting on a 109.5 % gain, although the five-year return is a more modest 58.2 %.

What is driving these moves? Recent momentum suggests that investors are growing more confident in the market's stability, especially with tailwinds from key tech sectors where Prosus has stakes. A solid 2.9 % rise in the past week and a 2.8 % bump in the past month hint that optimism has not faded, even amid some global uncertainty.

Of course, for all this excitement, the big question is value: is Prosus undervalued, fairly priced, or already stretching its limits? By our valuation framework, the company is undervalued in 3 out of 6 key checks, giving it a value score of 3. But what does this actually mean for investors? Let us walk through the main ways analysts determine a company's value. And, stick around—after covering the classic approaches, I will share a more holistic method that many investors miss.

Prosus delivered 69.7% returns over the last year. See how this stacks up to the rest of the Multiline Retail industry.

Approach 1: Prosus Discounted Cash Flow (DCF) Analysis

The Discounted Cash Flow (DCF) model estimates what a company is really worth by projecting its future cash flows and then discounting them back to today's value. This helps investors understand whether the current stock price offers a bargain compared to its long-term potential.

For Prosus, the latest reported Free Cash Flow stands at $1.76 billion. Analysts project that this will rise over the coming years, reaching an estimated $3.58 billion by 2028. Estimates for the next five years are provided by analysts, while projections beyond that are extended by Simply Wall St and reach a forecasted $6.36 billion in 2035.

When these anticipated cash flows over the next decade are summed and discounted to reflect today’s dollars, the calculated intrinsic value from the DCF model is €38.02 per share. However, when measured against the current share price, this analysis suggests the stock is trading at a 43.6% premium to its fair value. In short, Prosus stock appears overvalued using the DCF approach.

Result: OVERVALUED

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

Our Discounted Cash Flow (DCF) analysis suggests Prosus may be overvalued by 43.6%. Find undervalued stocks or create your own screener to find better value opportunities.

Approach 2: Prosus Price vs Earnings (PE Ratio)

The Price-to-Earnings (PE) ratio is a classic tool for valuing profitable companies like Prosus because it directly relates a company’s market value to its earnings power. In essence, the PE ratio shows how much investors are willing to pay today for each euro of current earnings, helping to gauge whether a stock looks cheap or expensive on an earnings basis.

However, what is considered a “fair” PE ratio can shift based on expectations for growth and the underlying risk profile. Companies with higher expected profit growth or with more stable, lower-risk operations usually command higher PE multiples. Those facing uncertainties might trade at a discount.

Looking at Prosus, its current PE ratio is 11.37x. That is much lower than both the average for similar companies in the Multiline Retail industry (22.25x) and its peers (51.86x). Yet, Simply Wall St’s proprietary Fair Ratio for Prosus is 15.38x, which represents the multiple you would expect given the company’s specific combination of growth potential, profit margins, risk factors, market cap, and sector.

Unlike simple comparisons to peers or the industry average, the Fair Ratio gives a more complete view of value by integrating the nuances that matter most. It helps investors avoid common pitfalls, such as overlooking company-specific strengths or weaknesses that can skew a basic industry comparison.

Since Prosus trades at a PE multiple of 11.37x versus its Fair Ratio of 15.38x, it appears the stock is undervalued by this measure.

Result: UNDERVALUED

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 Prosus Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives. In simple terms, a Narrative is your unique perspective on a company’s future, combining your view of its story with your estimates for revenue, earnings, and margins to determine what you believe is a fair value.

Unlike standard metrics, Narratives connect a company’s story, such as Prosus investing heavily in AI or launching new IPOs, to a clear financial forecast. This approach makes it easy to see how your assumptions play out in fair value terms. Narratives are easy to use and available to everyone within Simply Wall St’s Community page, a tool that millions of investors rely on worldwide.

By comparing your Narrative-based fair value to the current market price, you can decide with greater confidence whether to buy, hold, or sell, all while tracking how your story changes when fresh news or earnings are released. Narratives update dynamically as conditions evolve.

For example, on Prosus, some investors believe its fair value should be as high as €70 per share, reflecting optimism about upcoming IPOs and ecosystem synergies. Others set their estimate much lower, at €45, if they think operational improvements may disappoint.

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