Does Systemair’s Recent Bounce Signal an Opportunity After New Sustainability Partnerships?

• Ever wondered if Systemair’s current stock price represents a real bargain, or if there is more to the story beneath the surface?
• The stock has experienced a mild bounce this week, up 3.2%, but is still down 12.3% year-to-date. This suggests a shift in market sentiment and potential opportunity for value seekers.
• In recent weeks, industry headlines have focused on increased investment in sustainable ventilation technology and new partnerships announced by Systemair. This provides fresh context for both the recent price recovery and longer-term strategies.
• Systemair currently scores a 3 out of 6 on our valuation checks, putting it right in the middle of the pack. Here is a breakdown of what this means using a few classic valuation methods, followed by a look at why those numbers might not tell the whole story.

Find out why Systemair's -13.4% return over the last year is lagging behind its peers.

Approach 1: Systemair Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow (DCF) valuation estimates a business’s worth by projecting its future cash flows and discounting those values back to the present day. For Systemair, this approach is based on a two-stage free cash flow to equity model, which considers both short- and long-term expectations for the company’s performance.

Currently, Systemair’s last twelve months of free cash flow stand at SEK 897 million. Analyst consensus suggests free cash flow will climb to SEK 975 million by April 2028, reflecting steady growth. Projections extending out a full decade, using a blend of analyst forecasts and modest in-house estimates, see free cash flow approaching SEK 1,207 million by 2035. All projections are denominated in Swedish Krona (SEK).

Based on these calculations, Systemair’s intrinsic value is estimated at SEK 101.72 per share, according to this DCF model. With the model indicating a 23.3% discount to the current share price, the stock appears to be undervalued relative to its long-term cash flow potential.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Systemair is undervalued by 23.3%. Track this in your watchlist or portfolio, or discover 922 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 Systemair.

Approach 2: Systemair Price vs Earnings

The Price-to-Earnings (PE) ratio is one of the most widely used valuation metrics for profitable companies like Systemair, as it offers a straightforward snapshot of how much investors are willing to pay for each unit of the company's earnings. This measure works especially well for firms with consistent profits, helping investors compare valuations across the sector.

When evaluating what a “normal” or “fair” PE should be, it is important to consider factors such as growth expectations and risk. Companies with higher expected earnings growth or lower business risks typically command higher PE ratios, while mature or riskier firms generally trade at lower multiples.

Systemair currently trades at a PE ratio of 24.4x. By comparison, the average for its building industry peers stands at 25.4x, and the broader industry average is 19.1x. These numbers suggest Systemair sits slightly below its direct peers and a fair bit above the industry average, reflecting moderate growth and sector positioning.

Simply Wall St’s proprietary “Fair Ratio” for Systemair is 24.1x. Unlike basic peer or industry comparisons, this metric factors in Systemair’s unique mix of earnings growth, profit margin, risk, market cap, and industry dynamics. As a result, the Fair Ratio provides a more tailored, accurate view of what the stock should trade at, helping investors avoid the pitfalls of simple, one-size-fits-all benchmarks.

With Systemair’s current PE ratio almost identical to its Fair Ratio, the valuation looks about right at current levels.

Result: ABOUT RIGHT

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1440 companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Systemair Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let’s introduce you to Narratives. A Narrative goes beyond just numbers by letting you tell your version of Systemair’s story. It combines your personal perspective on the company’s prospects with assumptions about its future revenue, earnings, margins, and fair value.

Think of a Narrative as a bridge between the qualitative side of investing (the company’s business model, strategy, and industry trends) and the quantitative forecasts (your estimates and fair value calculations). On Simply Wall St’s Community page, you can easily create or explore Narratives used by millions of investors, making this approach accessible to everyone, not just finance professionals.

With Narratives, you can decide when to buy or sell by comparing your estimated Fair Value to the current share price, and your view automatically updates as new news or earnings data becomes available. For example, one Systemair Narrative could expect revenue growth and profit margin expansion from ongoing innovation and exposure to emerging markets, resulting in a bullish SEK103 price target. Another Narrative might anticipate growth headwinds and set a much lower target, such as SEK83.

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