Moog (MOG.A): Valuation Perspectives Following Record Backlog and Third-Quarter Estimate Beat

Moog (MOG.A) just surprised Wall Street by not only surpassing revenue and earnings estimates for its fiscal third quarter, but also by setting a record-high backlog, now sitting at $2.7 billion. Management credited expansion in the Commercial Aircraft, Space and Defense, and Military Aircraft segments, emphasizing solid demand across both civilian and government markets. These results sparked a round of renewed optimism from analysts, who have responded by raising their confidence in Moog’s outlook and prospects. As a result, Moog’s share price has edged up recently, tracking a 1% rise over the past month and a strong 14% gain over the past three months. Looking back, its performance over the past year has been modest, with total returns just above 1%. However, the longer view tells a much different story, as shares are more than double where they were three years ago. This blend of steady long-term appreciation and recent momentum, especially following the third-quarter beat, suggests that perceptions of Moog’s growth potential and perhaps its risk profile could be changing. After this latest move, the big question for investors is whether Moog is still undervalued compared to its growth pipeline, or if the market has fully priced in the surge in orders and record backlog.

Most Popular Narrative: 7% Undervalued

According to the most widely followed narrative, Moog is currently undervalued by 7% compared to its projected fair value. This narrative points to a blend of recent order strength, future earnings growth, and profit margin expansion as justification for a higher price target.

"Moog is positioned to benefit from a sustained increase in global defense spending, with significant order backlog and direct exposure to U.S., NATO, and Indo-Pacific modernization programs. This is likely to drive multi-year revenue growth and increased earnings stability."

Curious how analysts are baking in both defense tailwinds and margin improvements to reach that higher target? There is a powerful mix of recurring growth and bold profitability assumptions at the heart of this value call. Want to see which metrics unlock that fair value and how industry trends feed into the growth model? The full narrative breaks down these surprising drivers.

Result: Fair Value of $217.5 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent tariff pressures or sudden cuts to global defense budgets could quickly challenge this optimistic outlook for Moog.

Find out about the key risks to this Moog narrative.

Another View: Discounted Cash Flow Perspective

While analyst targets rely on growth and margin projections, our DCF model takes a different path and also suggests Moog could be trading below what it is fundamentally worth. Which approach best captures future potential?

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 Moog 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 Moog Narrative

If you have your own perspective or want to test different assumptions, you can build a complete Moog analysis yourself in just a few minutes. Do it your way.

A great starting point for your Moog research is our analysis highlighting 3 key rewards and 1 important warning sign 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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