Assessing Ford After Its EV Expansion and 35% Stock Surge in 2025

• Ever wondered if Ford Motor stock is a bargain or just riding a wave? You might be surprised by what the numbers reveal.
• Ford's share price has climbed 5.8% in the past week and 35.3% year-to-date, signaling renewed investor interest and momentum.
• Recent headlines have centered around Ford's expanding EV lineup and strategic partnerships with battery suppliers, which have helped fuel optimism and some skepticism in the market. Developments like these have contributed to the recent upswing in the stock's price and affected how investors are sizing up both risk and opportunity.
• According to our valuation checks, Ford scores a 3 out of 6 on undervaluation, which is a useful starting point but not the whole story. Next, we will break down different approaches to valuing Ford, and at the end, share a smarter way to think about its true worth.

Find out why Ford Motor's 36.6% return over the last year is lagging behind its peers.

Approach 1: Ford Motor Discounted Cash Flow (DCF) Analysis

The Discounted Cash Flow (DCF) model is a widely used valuation approach that estimates a company's worth by projecting its expected free cash flows into the future and then discounting them back to today’s value. This method aims to capture the time value of money and provides a forward-looking perspective on intrinsic value.

For Ford Motor, the current Free Cash Flow (FCF) stands at $11.75 billion. Analysts provide direct forecasts for the next few years, with 2026 FCF projected at $5.14 billion and 2027 at $5.79 billion. Beyond those years, Simply Wall St extrapolates the FCF trend, with expected cash flows gradually declining over the next decade. For instance, by 2035, FCF is projected at around $3.21 billion. All values are reported in US dollars.

According to the DCF calculations using the 2 Stage Free Cash Flow to Equity model, the intrinsic fair value for Ford's stock comes to $8.63 per share. Compared to the current market price, this implies the stock is trading at a premium of 51.3%, indicating substantial overvaluation relative to the company’s cash flow fundamentals.

Result: OVERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Ford Motor may be overvalued by 51.3%. Discover 850 undervalued stocks or create your own screener to find better value opportunities.

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

Approach 2: Ford Motor Price vs Earnings

The Price-to-Earnings (PE) ratio is a widely recognized metric for valuing profitable companies because it links a company’s market price to its actual earnings. This measure helps investors determine if a stock price is justified relative to the company’s ability to generate profit.

Growth expectations and risk play a pivotal role in setting what is considered a fair PE ratio. Companies with higher expected earnings growth or lower risks typically earn higher PE multiples, reflecting investors’ willingness to pay more for future profits.

Ford Motor’s current PE ratio is 11.1x. This compares to the auto industry’s average PE of 18.8x and the average among Ford’s key peers at 23.4x. On the surface, this makes Ford look like a bargain relative to the sector.

However, Simply Wall St’s proprietary Fair Ratio model calculates a fair PE for Ford of 17.5x, factoring in its projected earnings growth, industry landscape, profit margins, market size, and risk profile. This makes the Fair Ratio more precise than generic peer or industry benchmarks because it provides a tailored yardstick for Ford’s specific situation.

Since Ford’s actual PE of 11.1x is well below its Fair Ratio of 17.5x, this strongly suggests the stock could be undervalued at current prices.

Result: UNDERVALUED

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1405 companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Ford Motor Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives. A Narrative is a simple, powerful tool that lets you express your personal view of a company, linking your own story and outlook on Ford Motor to your expectations for future revenue, profit margins, and fair value. Narratives connect the dots between Ford's business journey, a clear financial forecast based on your assumptions, and an up-to-date fair value estimate.

On Simply Wall St's Community page, millions of investors already use Narratives because they make investment decision-making more transparent and accessible. Each Narrative shows exactly how a user's assumptions lead to their fair value calculation, letting you compare yours directly to the latest share price so you can decide if Ford looks like a buy, hold, or sell for you.

Narratives stay relevant and informative, automatically updating as new information such as news, earnings, or analyst changes comes in. For example, one investor might assume Ford's margins will improve and see a fair value of $16.0, while another, more cautious about margins and revenue, may estimate only $8.0 per share. Narratives help you see a spectrum of views and choose your own route to smarter investing.

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