Is APi Group (APG) Still Attractive After Recent Pullback And Strong Multi‑Year Gains

• Wondering whether APi Group’s current share price lines up with its underlying worth, or if the recent run has left it looking stretched or still reasonable.
• The stock closed at US$41.14, with returns of 5.6% year to date and 34.4% over the past year, even though the price has fallen 4.7% over the last week and 12.0% over the last month.
• Recent attention around APi Group has focused on its longer term share price performance, including a 3 year return of 168.3% and a 5 year return of 201.0%. This context helps frame today’s price moves as investors reassess how much of that long run performance is already reflected in the current valuation.
• APi Group currently has a valuation score of 5/6. The sections that follow break that down using multiple valuation approaches and also point to an even richer way to think about value at the end of the article.

Find out why APi Group's 34.4% return over the last year is lagging behind its peers.

Approach 1: APi Group Discounted Cash Flow (DCF) Analysis

The Discounted Cash Flow, or DCF, model estimates what a stock could be worth by projecting the company’s future cash flows and then discounting those back to today’s value.

For APi Group, the model uses a 2 Stage Free Cash Flow to Equity approach. The latest twelve month free cash flow is $685.27 million. Analyst estimates and extrapolations point to projected free cash flow of $2.02 billion in 2035, with interim projections such as $815.73 million in 2026 and $1.17 billion in 2028, all in $ terms. Simply Wall St discounts these future cash flows back to today using its own assumptions about risk and required return.

On this basis, the DCF model arrives at an estimated intrinsic value of $54.69 per share. Compared with the recent share price of $41.14, this indicates that the stock trades at a 24.8% discount to that DCF estimate. On this specific cash flow based view, APi Group appears to be undervalued.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests APi Group is undervalued by 24.8%. Track this in your watchlist or portfolio, or discover 54 more high quality undervalued stocks.

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

Approach 2: APi Group Price vs Sales

For companies where revenue is a key driver and earnings can be influenced by accounting choices, the P/S ratio is a useful way to compare what investors are paying for each dollar of sales. Higher growth expectations or lower perceived risk usually support a higher “normal” P/S, while slower growth or higher risk tend to justify a lower multiple.

APi Group currently trades on a P/S of 2.18x. This sits above the Construction industry average of 1.40x, but below the peer group average of 3.86x. Simply Wall St’s Fair Ratio for APi Group is 2.42x, which is its proprietary estimate of an appropriate P/S level after considering factors such as earnings growth, profit margins, industry, market cap and company specific risks.

This Fair Ratio is designed to be more tailored than a simple comparison with industry or peers, because it adjusts for company characteristics rather than assuming all stocks should trade on the same benchmark. Comparing APi Group’s current 2.18x P/S with the 2.42x Fair Ratio suggests the stock is trading below that model based reference point.

Result: UNDERVALUED

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Upgrade Your Decision Making: Choose your APi Group Narrative

Earlier the article mentioned that there is an even better way to think about valuation, and Narratives are that tool, where you set out your story for APi Group, link it to your assumptions for future revenue, earnings and margins, and the platform then converts that story into a forecast and a fair value that can be compared with today’s price to help you decide whether APi Group looks attractively or fully priced.

On Simply Wall St’s Community page, millions of investors use Narratives to do exactly this. They update automatically when new information such as earnings, guidance or news is added, so your view does not stay frozen while the company moves on.

For APi Group, one investor might build a Narrative close to the analyst consensus, using the US$9.6b revenue, US$783.5m earnings and 41.4x P/E assumption for 2029 and arriving at a fair value near US$52.00. A more cautious investor could instead plug in lower revenue or margin assumptions and a lower P/E, producing a meaningfully lower fair value, and the difference between each Narrative’s fair value and the live share price is what helps each investor decide whether APi Group still fits their portfolio.

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