Reassessing Paramount Group (PGRE) Valuation After Its 41% One-Year Share Price Rebound

Paramount Group (PGRE) has quietly delivered a strong run for investors over the past year, even as office real estate remains out of favor. With shares up about 41% year over year, it is worth a closer look.

See our latest analysis for Paramount Group.

The stock’s 1 year total shareholder return of 41.42% alongside a 32.86% year to date share price return suggests sentiment has meaningfully improved, even if recent weekly moves have cooled. This signals momentum that is moderating rather than reversing.

If Paramount Group’s rebound has you rethinking what else might be mispriced, it could be a good moment to explore fast growing stocks with high insider ownership for fresh ideas.

Yet with Paramount still posting shrinking revenue, analyst targets sitting below the current price, and the stock only recently recovering multi year losses, investors may wonder whether this is a genuine value opportunity or if it is already pricing in a full turnaround.

Price-to-Sales of 2.1x: Is it justified?

On a price-to-sales basis, Paramount Group trades at 2.1 times revenue, which makes the current share price look demanding rather than cheap.

The price-to-sales multiple compares the market value of the company to the revenue it generates, a common yardstick for REITs where earnings can be volatile. For Paramount, this ratio suggests investors are paying a relatively high price for each dollar of sales despite the company being unprofitable and facing revenue decline.

Against peers, Paramount looks expensive versus the broader comparison group on a price-to-sales basis (2.1x versus 1.8x). This highlights that the market is assigning it a premium. Yet relative to its own estimated fair price-to-sales ratio of 2.5x, there is also an argument that the multiple could drift higher over time if sentiment and fundamentals improve, implying some room for re rating.

Explore the SWS fair ratio for Paramount Group

Result: Price-to-Sales of 2.1x (OVERVALUED)

However, lingering revenue and earnings contraction, combined with a share price already above analyst targets, could quickly unwind optimism if fundamentals fail to improve.

Find out about the key risks to this Paramount Group narrative.

Another View on Value

Our DCF model paints a far harsher picture, indicating PGRE is trading well above its estimated fair value, with a fair value near $0.44 versus a $6.59 share price. If cash flows do not improve meaningfully, is the market leaning too hard on sentiment rather than fundamentals?

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 Paramount Group 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 911 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 Paramount Group Narrative

If you see the numbers differently or want to stress test your own view, you can build a complete narrative in just a few minutes: Do it your way.

A great starting point for your Paramount Group research is our analysis highlighting 2 important warning signs 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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