Analyzing Flowserve Stock After 32.9% Surge and New Acquisition Headlines

• Wondering if Flowserve stock is undervalued or a hidden gem? Let’s break down what recent trends reveal for anyone curious about finding real opportunity here.
• While the stock dipped 3.0% over the past week, it’s surged an impressive 32.9% in just the last month. Its 17.1% year-to-date and 15.2% one-year gains have become eye-catching to growth-oriented investors.
• Recent headlines have focused on Flowserve’s strategic acquisitions and expanded partnerships across global infrastructure projects. These moves are seen as key drivers behind the stock’s strong upward momentum and have sparked new conversation about how the market views Flowserve’s growth prospects in the sector.
• Currently, Flowserve lands a valuation score of 4 out of 6, showing the company is considered undervalued by several reliable checks. Next, we’ll run through how that score gets calculated and why there might be an even more insightful way to judge the real value at the end of the article.

Flowserve delivered 15.2% returns over the last year. See how this stacks up to the rest of the Machinery industry.

Approach 1: Flowserve Discounted Cash Flow (DCF) Analysis

The Discounted Cash Flow (DCF) model estimates a company's intrinsic value by projecting its future cash flows and then discounting those amounts back to today’s dollars. This approach provides a way to gauge whether a stock is trading below or above its true value based on anticipated cash generation capacity.

For Flowserve, the most recent Free Cash Flow stands at $625 million. Analyst forecasts suggest Free Cash Flow will remain around the mid $500 million mark for the next few years, closing at $610.9 million by 2029. These forecasts incorporate three sets of analyst estimates for the earlier years. From 2030 onward, Simply Wall St continues projections using conservative growth assumptions. This careful blend produces a comprehensive ten-year outlook, all denominated in US dollars.

Based on the cash flow projections, Flowserve’s fair value is estimated at $80.35 per share by DCF analysis. Compared with the current price, the model indicates Flowserve stock is trading at a 16.4% discount, which points to it being undervalued right now.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Flowserve is undervalued by 16.4%. Track this in your watchlist or portfolio, or discover 879 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 Flowserve.

Approach 2: Flowserve Price vs Earnings (PE Ratio)

For established, consistently profitable companies like Flowserve, the Price-to-Earnings (PE) ratio is a preferred metric because it reveals how much investors are willing to pay for each dollar of reported earnings. This multiple is especially helpful for comparing valuations among companies that are similarly profitable.

Growth outlook and risk fundamentally shape what is considered a normal or fair PE ratio. Fast-growing, lower-risk businesses often justify higher PE ratios, while slower growth or greater uncertainty tend to pull those multiples down.

Flowserve is currently trading at an 18.9x PE ratio. That is lower than both the Machinery industry’s 23.9x average and the 33.7x average among its closest peers, suggesting Flowserve is priced more conservatively compared to comparable companies.

However, Simply Wall St’s proprietary "Fair Ratio" takes this comparison to a more insightful level. Unlike industry and peer averages, which overlook important nuances, the Fair Ratio reflects Flowserve’s actual earnings growth, margin profile, market cap, risk factors, and sector dynamics. This results in a tailored benchmark of 26.4x for the company.

Since Flowserve’s current PE ratio of 18.9x is meaningfully below its Fair Ratio of 26.4x, the stock appears undervalued on this basis as well.

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 Flowserve Narrative

Earlier we mentioned there's an even better way to understand valuation, so let's introduce you to Narratives. A Narrative is simply your own story about Flowserve, built not just from numbers but also from your assumptions and expectations about its future, how you think revenue will grow, what margins might be, and the fair value you estimate as a result. Narratives help connect the dots between Flowserve’s business fundamentals, your specific financial forecasts, and an actionable estimate of fair value. Available right on Simply Wall St's Community page and used by millions of investors, Narratives make this process intuitive and accessible, even if you’re not a financial expert.

The real power comes from comparing your Narrative’s fair value with the current share price to decide if Flowserve is a buy, a sell, or one to watch. What’s more, each Narrative is dynamic and automatically updates when significant news or new earnings data arrives, so your view stays current. For example, some investors recently valued Flowserve as high as $76 based on robust digital solutions growth and nuclear-driven bookings, while others saw downside risks from competitive pressures and set fair value closer to $60. These diverse perspectives show how Narratives let every investor make decisions grounded in both data and personal conviction, helping you gain confidence in your next move.

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