Is PLDT’s Recent 6% Rebound a Sign of Renewed Value for 2025?

• Ever wondered if PLDT's shares are actually undervalued, or if you're just catching last year's hype? Let’s dig in together.
• The stock has climbed 3.6% over the past week and 6.3% in the last month, showing renewed interest even after a challenging year where it's still down 6%.
• Recent headlines have put the spotlight on sector-wide shifts and PLDT's latest strategic moves, stoking investor speculation about future growth. Reports of ongoing digital infrastructure investments and updates on regulatory developments continue to shape market perceptions.
• PLDT scores a 5 out of 6 on our valuation checklist, suggesting the stock clears most undervaluation benchmarks. Still, there is an even smarter way to value it, which we’ll cover at the end of this article.

Find out why PLDT's -6.0% return over the last year is lagging behind its peers.

Approach 1: PLDT Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow (DCF) model estimates the true value of a business by projecting its expected future cash flows and discounting them back to today’s value. This approach helps investors look past short-term noise and focus on longer-term earning power.

For PLDT, analysts calculate Free Cash Flow (FCF) for recent periods, which currently stands at a negative ₱215.6 million. This means the company is presently burning cash rather than generating it. However, projections are optimistic. Cash flow is expected to rebound to ₱63.6 billion by the end of 2027 and continue to grow each year, reaching ₱112.9 billion by 2035, based on analyst estimates and further extrapolation by Simply Wall St. These impressive compounding numbers are key drivers in the valuation outcome.

The result is an estimated intrinsic value of ₱5,473 per share. With the current share price trading at a 78.6% discount to this modeled figure, the DCF suggests PLDT stock is significantly undervalued based on long-term cash flow assumptions.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests PLDT is undervalued by 78.6%. Track this in your watchlist or portfolio, or discover 869 more undervalued stocks based on cash flows.

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

Approach 2: PLDT Price vs Earnings

The Price-to-Earnings (PE) ratio is a go-to metric for valuing profitable companies because it quickly shows how much investors are willing to pay for each peso of earnings. For companies that earn a steady profit like PLDT, the PE ratio reflects both market growth expectations and perceived risks. As a rule of thumb, a higher-growth, lower-risk company often supports a higher PE. On the other hand, uncertainty and weaker outlooks can bring the ratio lower.

PLDT currently trades at a PE of 7.91x, which is noticeably below both the wireless telecom industry average (about 19x) and the peer group average (roughly 15.4x). At first glance, this could suggest that PLDT is cheap compared to its peers and the broader industry.

However, rather than relying only on simple comparisons to other companies, Simply Wall St evaluates a "Fair Ratio" tailored to PLDT. This Fair Ratio (7.89x) factors in specific elements like PLDT’s expected earnings growth, profit margins, market cap, and the unique risks it faces, along with industry nuances. By considering all these variables, the Fair Ratio is a more precise and reliable benchmark than industry or peer averages alone.

Comparing PLDT's current PE (7.91x) to its Fair Ratio (7.89x), the stock is trading almost exactly where it should be based on its fundamentals and opportunity. Investors considering PLDT can take comfort in knowing the current valuation lines up with its realistic prospects.

Result: ABOUT RIGHT

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1403 companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your PLDT Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let's introduce you to Narratives. A Narrative is a simple way for investors to connect a company's story and outlook with the numbers that drive fair value, such as future revenue, earnings, and profit margins. Rather than relying solely on backward-looking metrics or broad industry averages, Narratives invite you to bring your own perspective, outlining the specific business changes, risks, and catalysts you believe are most important.

On Simply Wall St’s Community page, you will find millions of investors sharing and updating unique Narratives, making it easy to compare viewpoints and see how stories evolve as new data arrives. Narratives automatically translate your expectations and scenarios into financial forecasts and fair value calculations, helping you quickly decide if a stock looks undervalued, overvalued, or fairly priced compared to its current share price. Plus, whenever something changes, such as new earnings, significant news, or regulatory shifts, your Narrative updates automatically to keep your analysis relevant.

For example, some investors are bullish on PLDT, forecasting revenues of ₱239.3 billion and a target price of ₱2,070 if new digital products and fintech growth accelerate. Others see fierce competition and regulatory risks leading to lower earnings and a price target as low as ₱1,200. Narratives make it clear how different views and assumptions lead to different estimates of fair value, empowering you to invest with confidence and insight.

Do you think there's more to the story for PLDT? Head over to our Community to see what others are saying!

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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