A Look at Saab (OM:SAAB B) Valuation Following Major Colombia and Germany Defense Contract Wins

Saab (OM:SAAB B) just secured an order from the Colombian Government worth EUR 3.1 billion for 17 Gripen E/F fighter jets, along with major electronic warfare system contracts with Airbus Defence and Space in Germany.

See our latest analysis for Saab.

The string of major contract wins, including the Colombia fighter jet deal and fresh electronic warfare agreements in Germany, comes amid building share price momentum. Saab’s share price has soared 121% year-to-date and the company’s 1-year total shareholder return is an eye-catching 108%. This reflects both substantial recent wins and persistent long-term optimism from investors. While shares have cooled modestly in the past day, the multi-year total shareholder return near 448% over three years cements its reputation as a long-term outperformer with accelerating demand for its defense technology.

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With a soaring share price and a string of record contracts, the big question for investors now is whether Saab remains undervalued given its growth outlook, or if recent gains mean the market has already priced in future success.

Most Popular Narrative: 7% Overvalued

With Saab’s shares recently closing above the consensus fair value and pricing in years of robust earnings growth, the market is looking ahead. The most widely followed narrative draws upon contract momentum, tech investments, and global defense spending to shape its outlook.

The significant ramp-up in global defense spending, especially following the recent NATO commitment for member states to target 5% of GDP by 2030 to 2035, directly supports sustained demand for Saab's advanced defense solutions. Saab's strong backlog (around SEK 200 billion) and rising book-to-bill ratio position it to benefit from this long-duration trend. This may drive topline growth over the next several years.

Read the complete narrative.

Think these fair value estimates are just surface deep? There is a bold set of growth projections, profit upgrades, and margin shifts hidden behind this number. Could one less-expected contract or tech breakthrough push shares even higher? Unpack the story to see what really fuels this premium valuation.

Result: Fair Value of $481 (OVERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, Saab’s heavy reliance on government contracts and the threat of tightening export controls remain significant risks that could challenge its growth outlook.

Find out about the key risks to this Saab narrative.

Build Your Own Saab Narrative

Not convinced by the current outlook or want to dive deeper into Saab’s numbers yourself? Build your own view on what really matters to future returns, and you can Do it your way in under three minutes.

A good starting point is our analysis highlighting 2 key rewards investors are optimistic about regarding Saab.

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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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