LiveWire Group (LVWR): Valuation Insights Following S&P TMI Index Inclusion

LiveWire Group (LVWR) has just been added to the S&P TMI Index, catching the attention of both retail and institutional investors. Index inclusions like this can lead to greater visibility and increased trading activity for a stock.

See our latest analysis for LiveWire Group.

LiveWire Group’s addition to the S&P TMI Index has sparked renewed interest, coming on the heels of relatively stable share price action. While the latest share price return metrics show only modest movement, the company’s 1-year total shareholder return remains slightly negative. This reflects a period of subdued momentum amid changing investor sentiment.

If you’re interested in seeing how auto manufacturers are faring as a group right now, this is the perfect time to discover See the full list for free.

The question now is whether LiveWire Group is an overlooked value play after its index debut, or if investors have already factored in any potential upside and left little room for a bargain buy.

Price-to-Sales of 45.4x: Is it justified?

LiveWire Group currently trades at a price-to-sales ratio of 45.4x, putting its valuation well above that of both the auto industry and its direct peers. Despite a last close price of $5.31, this lofty multiple suggests the market expects significant future growth or a breakthrough in business fundamentals.

The price-to-sales ratio measures how much investors are willing to pay for each dollar of a company's revenue. In sectors like auto manufacturing, where profits are often cyclical or volatile, this multiple provides insight into market sentiment about revenue potential and business model viability. For an early-growth or currently unprofitable company, a high multiple can reflect optimism, but only if future sales growth or margin expansion justifies it.

Compared to the US auto industry’s average price-to-sales ratio of just 1.4x and peer average of 0.8x, LiveWire Group’s 45.4x figure is strikingly elevated. This highlights a major disconnect. Unless LiveWire’s sales ramp dramatically outpaces the sector, this valuation could face pressure to normalize toward industry norms.

See what the numbers say about this price — find out in our valuation breakdown.

Result: Price-to-Sales of 45.4x (OVERVALUED)

However, LiveWire Group’s persistent negative net income and lack of recent revenue acceleration remain key risks that could challenge this valuation outlook.

Find out about the key risks to this LiveWire Group narrative.

Build Your Own LiveWire Group Narrative

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A great starting point for your LiveWire Group research is our analysis highlighting 2 important warning signs that could impact your investment decision.

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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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