Signet Jewelers Stock Surges 32% as Strategic Acquisitions Lift Valuation in 2025

Trying to figure out what to do with Signet Jewelers stock? You’re far from alone. This company, known for its lineup of well-established jewelry store brands, has been on quite the ride. Just take a look: shares have posted a 32.9% gain year-to-date, vastly outpacing the broader market. Even the one-month return stands strong at 8.0%. Over the past three years, the stock is up by over 60%, and a stunning 393.1% across five years. If you’ve been holding, congratulations!

But what’s fueling these moves? Lately, Signet has been making headlines with its strategic acquisitions aimed at expanding into new jewelry segments and digital platforms. These moves appear to have boosted investor confidence, especially as consumers lean further into customized and online jewelry shopping. The upward pressure on the stock seems directly tied to optimism around these changes. It is worth noting that, with any retail name, changing economic winds can quickly shift sentiment.

Now, before we go deeper, let’s talk valuation. On a standard set of six valuation checks, Signet scores a 2, meaning it is considered undervalued on two out of six key measures. That may not scream “deep value,” but it does suggest there is more to the story beneath the headline numbers. So, what do all these checks tell us, and is there a smarter way to weigh Signet’s true worth? Let’s dig into the details together, then I’ll share an approach I think is even more insightful.

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

Approach 1: Signet Jewelers Discounted Cash Flow (DCF) Analysis

The Discounted Cash Flow (DCF) model estimates a company’s true worth by projecting future cash flows and discounting them back to today’s value. This approach gives investors a sense of what the business is fundamentally worth, independent of short-term market swings.

For Signet Jewelers, the current Free Cash Flow stands at $482 million. Analysts have provided cash flow forecasts for the next five years, and projections are then extrapolated using the 2 Stage Free Cash Flow to Equity model. By 2035, Simply Wall St projects the company’s free cash flow to reach approximately $453 million, based on moderate and steady assumptions.

All figures are reported in US dollars. Each future year’s cash flow is discounted to reflect its value in today's terms. After adding up these discounted cash flows, the DCF analysis arrives at an intrinsic value per share of $152.45. At recent prices, this represents a 32% discount, suggesting the stock is trading well below its estimated fair value.

In simple terms, Signet appears attractively priced using this cash flow-based yardstick.

Result: UNDERVALUED

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

Our Discounted Cash Flow (DCF) analysis suggests Signet Jewelers is undervalued by 32.0%. Track this in your watchlist or portfolio, or discover more undervalued stocks.

Approach 2: Signet Jewelers Price vs Earnings (PE) Multiple

The price-to-earnings (PE) ratio is widely used to assess a profitable company’s valuation, as it compares the stock price directly to its earnings. For companies like Signet Jewelers that generate steady profits, the PE multiple provides a quick way to gauge how much investors are willing to pay per dollar of earnings.

What counts as a "normal" or "fair" PE ratio can vary depending on growth expectations and risk. Companies with stronger growth prospects or higher quality earnings tend to command higher PE multiples, while those facing more uncertainty or slower growth warrant lower ones.

Signet’s current PE ratio is 32.6x, well above both the specialty retail industry average of 16.9x and the average of its peers at 13.9x. While this premium might seem high at first glance, it is important to dig deeper. Simple comparisons can overlook company-specific factors that influence what is truly fair.

Simply Wall St's proprietary “Fair Ratio” stands at 32.1x for Signet. This takes into account not just industry averages but also factors like the company’s earnings growth, profit margins, its market cap, and any relevant risks. Because it is tailored to Signet’s unique profile, the Fair Ratio offers a more meaningful standard than generic benchmarks.

Here, the actual PE multiple of 32.6x closely matches the Fair Ratio of 32.1x, signaling that the stock’s valuation looks reasonable based on its fundamentals 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 Signet Jewelers Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let's introduce you to Narratives. A Narrative is your personalized story about a company. More than just numbers, it is your perspective on where the business is headed, what will drive its future, and what those drivers mean for fair value. Narratives connect the dots between a company’s unique story, a set of key financial forecasts, and what you believe the stock is worth.

On Simply Wall St, Narratives make investing more accessible by allowing millions of investors to easily build, share, and compare their own investment cases right on the Community page. This tool empowers you to judge when to buy, hold, or sell by directly comparing your estimated Fair Value to the current market price. Since Narratives update automatically as news, events, or earnings roll in, your analysis stays fresh and relevant.

For example, with Signet Jewelers, some investors are optimistic about the company's digital transformation and growth in lab-grown diamonds, forecasting a fair value as high as $130 per share. Others take a more conservative view, factoring in risks from flat unit sales or industry headwinds and estimating fair value near $90. Narratives let you see, test, and refine your own perspective against these different viewpoints, helping you make smarter, more confident investment decisions.

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