Brookfield Business (NYSE:BBUC): Assessing Valuation After a 35% Share Price Climb

Brookfield Business (NYSE:BBUC) has recently caught investors’ attention, largely thanks to its steady climb over the past year. Shares are now up 35% over the past 12 months, which has sparked some fresh discussion around long-term prospects and market performance.

See our latest analysis for Brookfield Business.

That momentum is easy to spot, with Brookfield Business delivering a 35% total shareholder return over the last year as the business benefited from stronger risk sentiment and a rotation into value. The overall direction suggests investors see new growth potential emerging, especially as sentiment for select industrials remains elevated.

If steady gains like these have you curious about where else you might spot strong momentum, it could be the perfect time to broaden your search and discover fast growing stocks with high insider ownership

With such impressive gains, the big question is whether Brookfield Business is still trading at a discount or if the recent rally has already factored future expectations into the share price. Is there still a buying opportunity, or has the market already taken all anticipated growth into account?

Price-to-Sales of 0.3x: Is it justified?

Brookfield Business trades at a price-to-sales ratio of just 0.3x, putting its valuation significantly below its industrial peers. At a last close price of $34.06, the market appears to be discounting the company’s sale revenues compared to both the sector and its closest competitors.

The price-to-sales ratio compares a company’s stock price to its total sales per share. This makes it a useful tool for evaluating companies that are currently unprofitable or going through business transformation. For Brookfield Business, this multiple shows how investors are weighing the value of every dollar in sales generated, rather than focusing on its negative earnings.

The current ratio is substantially lower than the global industrials industry average of 0.8x and the peer group’s average of 0.6x. This steep discount is a strong signal that the market is taking a conservative view of Brookfield’s near-term performance. The pricing may reflect the persistent challenge of ongoing losses and recent earnings declines. If market perceptions shift or the underlying business stabilizes, there may be significant room for re-rating towards sector norms.

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

Result: Price-to-Sales of 0.3x (UNDERVALUED)

However, continued net losses and a lack of visible annual revenue growth could challenge confidence and limit further upside for Brookfield Business in the near term.

Find out about the key risks to this Brookfield Business narrative.

Another View: DCF Model Tells a Different Story

While the company looks undervalued from a sales perspective, our DCF model paints a very different picture. Based on this method, Brookfield Business is actually trading far above its estimate of fair value, which stands at just $0.85 per share. Are short-term gains distracting from deeper risks?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Brookfield Business for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own Brookfield Business Narrative

If you want to weigh the numbers for yourself or dive deeper into your own analysis, it only takes a few minutes to develop a unique perspective. Do it your way

A great starting point for your Brookfield Business 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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