Is Webull’s Recent 6% Decline a Sign to Revisit Its 2025 Valuation?

If you have been following Webull lately, you probably noticed the buzz in the investment community. Many investors are watching closely, trying to decide whether to double down or take profits now that the stock has had such a dynamic ride. Webull's story is hard to ignore. After climbing an impressive 28.7% since the start of the year and delivering a strong 33.3% gain over the past twelve months, expectations are running high. Despite those impressive long-term returns, the last month has brought a bit of a pullback with a 6.8% slide, and the most recent week saw another dip of 6.3%. This shift could mean investors are reassessing the risk or just locking in some of those earlier gains.

With market conditions in flux and ongoing developments affecting the trading platform space overall, it is natural to wonder: is Webull undervalued or are we seeing signs of cooling enthusiasm? To help answer that, we will dig into several different valuation approaches. By our current scoring system, Webull earns a value score of 2 out of 6, meaning it checks two important boxes for being undervalued. There is a lot to unpack here, so before you make any big moves, let us break down the valuation methods and then reveal an even more insightful approach to understanding what Webull might really be worth.

Webull scores just 2/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.

Approach 1: Webull Cash Flows

The Discounted Cash Flow (DCF) model is a fundamental tool investors use to estimate what a company is really worth. It works by projecting how much cash the business will generate in the future and then discounting that back to today’s dollars. In essence, it asks: what are all those future dollars really worth now?

For Webull, the latest reported Free Cash Flow (FCF) is $172.5 million. Analysts expect modest growth in FCF over the coming years, with projections steadily rising toward $259.2 million by 2035. Although analyst estimates typically cover only the next five years, these longer-term forecasts are extrapolated based on industry trends and company performance to provide a more complete picture.

After analyzing these numbers using a 2 Stage Free Cash Flow to Equity model, the estimated intrinsic (fair) value for Webull is $8.18 per share. However, this suggests a significant disconnect compared to where the stock is currently trading. The DCF model indicates Webull is approximately 82.9% overvalued at today's prices. In simple terms, the market price reflects much more optimistic growth than what a grounded cash flow analysis would support.

Result: OVERVALUED

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

Our DCF analysis suggests Webull may be overvalued by 82.9%. Find undervalued stocks based on DCF analysis or create your own screener to find better value opportunities.

Approach 2: Webull Price vs Earnings

The Price-to-Earnings (PE) ratio is a widely used valuation metric for profitable companies because it helps investors understand how much they are paying for each dollar of current earnings. A higher PE ratio often reflects expectations for higher growth or lower risk, while a lower PE ratio can indicate lower growth prospects or greater risk compared to peers.

Webull currently trades at a PE ratio of 12.7x. For comparison, the average PE for the capital markets industry is significantly higher at 27.0x, and the peer group average is 22.9x. Based on these benchmarks, Webull appears attractively priced compared to others in its space.

However, using Simply Wall St’s proprietary “Fair Ratio” provides added nuance. The Fair Ratio incorporates not only industry averages but also factors such as the company’s own earnings growth, profit margins, market cap, and risk profile. This creates a more holistic and relevant benchmark for the company than simply comparing industry averages or peers, which can overlook company-specific factors that are important.

The analysis shows that Webull’s actual PE ratio and its Fair Ratio are very close, with a difference of less than 0.10. This suggests that, at its current price, Webull is trading at approximately fair value based on its earnings power and outlook.

Result: ABOUT RIGHT

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

Upgrade Your Decision Making: Choose your Webull Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives. A Narrative is your personal story or perspective about a company like Webull, built around your own assumptions for future revenue, earnings, and margins. Instead of just relying on formulas, Narratives help you connect your unique outlook to a financial forecast and then to a clear fair value.

Narratives are simple to use and available right on Simply Wall St’s Community page, where millions of investors share their perspectives. With Narratives, you can instantly compare your fair value to the current price and decide if now is the right time to buy or sell. Because Narratives update dynamically with the latest news or earnings, your outlook always stays current and relevant.

For example, one Webull Narrative might see strong user growth and assign a much higher fair value. On the other hand, another investor who is more cautious about future trading volumes could result in a lower valuation. Narratives make it easy to weigh these perspectives and choose the approach that fits your own view of Webull’s future.

Do you think there's more to the story for Webull? Create your own Narrative to let the Community know!

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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