Where Does Delek Stand After Its 73% Surge and Mixed Valuation Signals in 2025?

If you are sizing up Delek US Holdings, you are definitely not alone. The stock has been turning heads lately, especially after a surge that pushed its year-to-date return to an impressive 73.6%. While it slipped by 1.1% over the past week, the broader picture is hard to ignore. Delek has climbed 67.7% in the past year and an eye-popping 214.7% over five years. Moves like these often spark questions: is this just momentum, or does the company offer real, lasting value?

Much of the excitement around Delek stems from changing perceptions about the energy sector's role and resilience in today's market. Investors are weighing geopolitical pressures, supply chain shifts, and lingering questions about future energy demand. Through those swings, Delek’s stock performance hints at both growth potential and sometimes, higher-than-average risk.

Valuation-wise, it's time to dig deeper. Delek US Holdings currently scores a 3 out of 6 on our valuation checklist, meaning it’s seen as undervalued based on half of the most important metrics. That’s a decent mark, but it’s not the whole story.

So what does the valuation really look like when you break down the different approaches? Let’s explore each valuation method in turn. Don’t worry, we’ll wrap up with an even better perspective for understanding what Delek might be worth to investors like you.

Delek US Holdings delivered 67.7% returns over the last year. See how this stacks up to the rest of the Oil and Gas industry.

Approach 1: Delek US Holdings Dividend Discount Model (DDM) Analysis

The Dividend Discount Model (DDM) is a valuation approach that estimates a company’s intrinsic value based on the present value of its expected future dividends. In Delek US Holdings’ case, this model relies on the company’s recent dividends, its payout ratio, and its projected dividend growth rate over time. The method helps to gauge whether the stock price fairly reflects the company’s dividend-generating power.

According to the latest data, Delek’s annual dividend per share stands at $1.02, but the model points to some weaknesses. The return on equity for Delek is negative at -3.2%, with a payout ratio of -8.75%. The DDM calculates a negative expected growth rate for dividends of roughly -3.5%, meaning dividend payouts are forecasted to shrink instead of grow.

Based on these factors, the intrinsic value estimate for Delek, derived from future dividend projections, lands at $9.97 per share. This is significantly lower than Delek’s recent stock price, suggesting the stock is trading 221.3% above what the DDM considers fair value. In other words, from a dividend-driven perspective, Delek US Holdings appears substantially overvalued at current prices.

Result: OVERVALUED

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

Our Dividend Discount Model (DDM) analysis suggests Delek US Holdings may be overvalued by 221.3%. Find undervalued stocks or create your own screener to find better value opportunities.

Approach 2: Delek US Holdings Price vs Sales

For companies where profits can swing but revenues remain steady, the Price-to-Sales (P/S) ratio is often the preferred way for investors to size up value. It is especially useful for industries like energy, where one-off charges, market swings, and cyclical pressures can distort earnings but tell less about underlying business momentum. The P/S multiple reflects what investors are willing to pay today for every dollar the company brings in through sales. This gives a clear baseline for comparing value regardless of bottom-line volatility.

The “right” P/S ratio depends on growth prospects and risk. Higher expected growth or lower risk warrants a premium P/S multiple, while stagnating businesses or higher risk should trade at a discount. Looking at Delek US Holdings, its current P/S ratio is 0.18x. When compared with the oil and gas industry average of 1.51x and a peer average of 0.22x, Delek trades well below most benchmarks. This indicates the market is pricing in either greater risk or muted growth expectations for the company.

Instead of relying just on industry and peer comparisons, Simply Wall St’s proprietary “Fair Ratio” offers a tailored estimate of the appropriate P/S multiple for Delek. In this case, it is 0.42x. The Fair Ratio considers additional factors like the company’s earnings growth, risk profile, profit margins, and market cap, offering a more complete picture than a simple peer average. This means it delivers a valuation benchmark better aligned with Delek’s unique situation.

With Delek’s actual P/S at 0.18x and its Fair Ratio at 0.42x, the difference is significant. The stock appears undervalued by this metric, suggesting the market has been excessively cautious relative to its underlying characteristics.

Result: UNDERVALUED

PS 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 Delek US Holdings Narrative

Earlier, we mentioned that there's an even better way to understand valuation, so let's introduce you to Narratives: an approachable, user-friendly tool for building your own story about a company, linking your expectations on its future sales, margins, and fair value to the underlying business story that matters to you.

With Narratives, you can align a company’s journey with numbers by combining your view of its prospects and risks with financial forecasts, and instantly see what fair value that scenario implies. This turns your perspective into a hands-on valuation.

This powerful feature is available to millions of investors via the Simply Wall St Community page, and lets you quickly check whether your story justifies a buy, hold, or sell by comparing your Fair Value to the market Price.

Because Narratives update as new earnings, news, or data arrive, your conclusions are always kept fresh. If Delek US Holdings’ margin outlook improves or headwinds intensify, your Narrative (and valuation) evolves automatically.

For example, among Delek’s active Narratives, bullish investors might target a value of $30 per share, reflecting a belief in operational improvements and industry tailwinds. More cautious users see fair value as low as $14, accounting for heightened risks and potential structural declines. This demonstrates how Narratives put personalized, nimble decision making within every investor’s reach.

Do you think there's more to the story for Delek US Holdings? 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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