Assessing Saab (OM:SAAB B) Valuation After Strong Shareholder Returns and Renewed Growth Momentum

Saab (OM:SAAB B) shares have gained just over 1% year-to-date, with the stock relatively steady over the past month. Investors may be weighing recent financial performance and broader market factors as they assess potential upside ahead.

See our latest analysis for Saab.

Saab’s share price momentum is picking up again, with a 1.8% rise in the past day and a year-to-date share price return of over 125%. This reflects renewed optimism around the company’s growth prospects. Even more striking, the total shareholder return over the past year stands at 118%. The longer-term performance has been exceptional, delivering compound growth for investors over the last three and five years.

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The real question for investors now is whether Saab’s recent run-up leaves the stock undervalued based on fundamentals, or if the market has already priced in its future growth. Could there still be a buying opportunity here?

Most Popular Narrative: 9% Overvalued

The most widely followed narrative pegs Saab’s fair value at SEK 481, compared to the stock’s last close at SEK 524.9. This framing focuses on macro growth forces and operational advantages to justify the prevailing valuation premium.

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

Read the complete narrative.

Want to know which ambitious assumptions power that bold price target? The narrative builds on surging growth forecasts and profitability upgrades rarely seen in traditional defense. Guess what drives the punchy earnings outlook and future market multiple? Get the full story and numbers hiding behind the fair value call.

Result: Fair Value of $481 (OVERVALUED)

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

However, risks remain, including Saab’s dependence on government contracts and the threat of tightening export controls. Both of these factors could challenge future growth.

Find out about the key risks to this Saab narrative.

Build Your Own Saab Narrative

If you’d like to dig deeper or craft your own perspective, you can assemble a personal assessment in just a few minutes. Do it your way

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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