Has Enviri’s 121% 2025 Rally Gone Too Far After Sustainable Partnerships News?

• Ever wondered whether Enviri’s recent surge is actually justified by its true value, or if things might be getting a little overheated? You’re not alone; many investors are watching closely right now.
• The stock has rocketed up, gaining 44.1% in the past month and posting an impressive 121.2% return year-to-date, making it one of the standout movers in its sector.
• Momentum seems to have picked up following reports of Enviri’s increased expansion into sustainable solutions and recent partnerships within the environmental services industry. Both of these developments have caught the market’s attention. Investors and analysts have debated whether these moves signal sustainable long-term growth or are just fueling near-term excitement.
• Currently, Enviri has a valuation score of 5 out of 6, suggesting it is undervalued in nearly all key areas. In the next sections, we’ll break down exactly how this was determined, along with a look at one method that could give you even more insight into what Enviri might really be worth.

Enviri delivered 147.8% returns over the last year. See how this stacks up to the rest of the Commercial Services industry.

Approach 1: Enviri Discounted Cash Flow (DCF) Analysis

The Discounted Cash Flow (DCF) model estimates what a company is truly worth by forecasting its future cash flows and discounting them back to today's value. This method helps to reveal a company's intrinsic value based on its expected ability to generate cash over time.

For Enviri, the analysis started with its current Free Cash Flow (FCF), which stands at a negative $33.31 million. While this figure might seem concerning, projections show rapid potential growth. Analysts expect the company's FCF to reach $31.55 million by the end of 2027. Projections extend out over the next ten years, with future cash flows increasing steadily, culminating in a forecasted $362.84 million by 2035. These estimates leverage both analyst forecasts for the near term and extrapolations for outer years.

According to this DCF model, Enviri's intrinsic value is calculated at $47.49 per share. With the model implying the stock is currently trading at a 61.4% discount to its intrinsic value, Enviri appears to be significantly undervalued based on its long-term cash-generating potential.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Enviri is undervalued by 61.4%. Track this in your watchlist or portfolio, or discover 926 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 Enviri.

Approach 2: Enviri Price vs Sales

The Price-to-Sales (P/S) ratio is often the preferred valuation metric for companies that are not currently profitable, as is the case with Enviri. Since earnings can fluctuate and even be negative during periods of investment or transition, sales provide a more stable and meaningful yardstick for assessing value, especially in industries where future growth is expected.

When determining what constitutes a "normal" or "fair" P/S multiple, growth expectations and perceived risks play a key role. Higher growth companies or those with less risk usually warrant higher multiples, while slower-growing or riskier businesses tend to trade on lower ratios to reflect their uncertain prospects.

As of now, Enviri trades on a P/S ratio of 0.66x. This is significantly below the Commercial Services industry average of 1.08x and also under the average of its direct peers, which stand at 1.41x. At first glance, this suggests Enviri might be undervalued compared to others in its sector.

However, to get a more tailored view, we can consider Simply Wall St’s proprietary “Fair Ratio.” This metric takes into account Enviri’s sales growth, industry, profit margins, market cap, and company-specific risks. It is more comprehensive than a simple comparison with sector averages, as it adjusts for the company's unique situation and prospects rather than painting with broad strokes.

Enviri’s Fair Ratio is calculated at 0.71x, which is just slightly above its current P/S of 0.66x. This close alignment means Enviri appears to be trading almost exactly in line with what its fundamentals suggest, even when factoring in its individual risk and growth profile.

Result: ABOUT RIGHT

PS ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1440 companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Enviri Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let's introduce you to Narratives. A Narrative is simply the story you believe about a company, your perspective on its business prospects, risks, and potential, linked directly to your estimates of future financials like revenue, earnings, and margins.

Rather than relying solely on ratios or consensus numbers, Narratives give you a structured way to turn your assumptions into a financial forecast and, ultimately, a fair value for a stock. Available to everyone within the Simply Wall St Community page, Narratives make it easy and approachable to set your expectations and see how they stack up.

They are especially powerful because your Narrative is continuously refreshed with the latest news, guidance, or results, letting you instantly see how changes in the business might affect its fair value. This helps you make smarter buy or sell decisions by clearly comparing your Fair Value to the market price.

For example, on Enviri, some investors are optimistic, assuming robust growth in sustainability services and estimating a fair value as high as $24.00. Others, citing cyclical risks and ongoing losses, see it closer to $9.50. Whichever story fits your outlook, Narratives let you act on your conviction with clarity.

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