Does Nebius Group’s Valuation Reflect Its Surge After Major Cloud Partnership in 2025?

• Thinking about investing in Nebius Group? If you have ever wondered whether the recent run-up justifies the price or if there is real value to be found, you are in the right place.
• The stock has been on a wild ride, with a 196.8% surge so far this year and a jaw-dropping 338.5% return over the past 12 months, even after a short-term dip of -11.4% in the last week.
• In the past month, headlines have focused on Nebius Group's rapid expansion into cloud services as well as a hefty new partnership with a global tech player. This has fueled speculation about its long-term market share. These news items have contributed to both the excitement and the volatility recently seen in its share price.
• When it comes to valuation, Nebius Group clocks a score of 3 out of 6 for being undervalued based on our checks, so there is plenty to unpack. We are about to break down the various ways investors are sizing up its value, so stick around until the end for a smarter approach to understanding what the numbers really mean.

Nebius Group delivered 338.5% returns over the last year. See how this stacks up to the rest of the Software industry.

Approach 1: Nebius Group Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow (DCF) model estimates a company's intrinsic value by projecting its future free cash flows and discounting them back to today's dollars. This approach helps investors look beyond headline numbers and assess what the business could actually be worth based on its financial fundamentals.

For Nebius Group, the most recent annual free cash flow was -$1.13 Billion, indicating the company is still in heavy investment mode. Looking ahead, projections for 2029 estimate a free cash flow of $767.1 Million, showing a significant expected turnaround. Over the next ten years, cash flows are forecasted to move from negative territory toward strong positive numbers, with estimates reaching as high as $3.8 Billion by 2035 according to Simply Wall St's model.

Based on these projections, the DCF model calculates an intrinsic fair value of $128.78 per share. Currently, Nebius Group trades at a 29.7% discount to this calculated value, suggesting the stock appears significantly undervalued according to this approach.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Nebius Group is undervalued by 29.7%. Track this in your watchlist or portfolio, or discover 904 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 Nebius Group.

Approach 2: Nebius Group Price vs Book Value

The Price-to-Book (P/B) ratio is a popular multiple used to value companies, especially in fast-moving sectors like software where profits can fluctuate, but book value offers a baseline for assessing financial stability and asset backing. P/B is often favored for companies that are reinvesting heavily in growth and may not yet have consistent earnings, making it a relevant metric for Nebius Group at this stage in its development.

A "normal" or "fair" P/B ratio can vary significantly depending on expectations for future growth and the level of risk involved. High-growth, innovative firms are typically valued at a higher multiple because investors anticipate stronger returns down the line. In contrast, companies facing challenges tend to trade at lower multiples. Comparing these benchmarks helps gauge whether a stock's valuation is stretched or reasonable.

Nebius Group currently trades at a P/B ratio of 4.74x. For context, its industry average is 3.47x, and its peer group averages 6.51x. This puts Nebius Group above the industry norm but below the peer average, reflecting a market view that sees meaningful growth potential, but perhaps some near-term risk as well.

Simply Wall St’s proprietary "Fair Ratio" takes this a step further, calculating the multiple Nebius Group deserves based on factors like its earnings growth outlook, profit margins, competitive positioning, and intrinsic industry risks. Unlike simple peer comparisons, the Fair Ratio adjusts for Nebius Group's unique profile, offering a more tailored benchmark that goes beyond surface-level averages.

Comparing Nebius Group’s actual P/B of 4.74x against the (unspecified) Fair Ratio, the valuation appears about right if that gap is less than 0.10.

Result: ABOUT RIGHT

PB ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1416 companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Nebius Group Narrative

Earlier we mentioned there's an even better way to understand valuation. Let's introduce you to Narratives, a simple but powerful tool for investing with confidence. A Narrative is your own story or perspective about a company like Nebius Group. It brings together your viewpoint on what the business can achieve in the future, the assumptions you make around growth, margins, and fair value, and captures how new developments might alter your outlook, all in one place.

Narratives connect the dots from a company’s business story to your financial forecast and finally to an actionable fair value. This means you are not just reacting to stock charts or analyst targets; you are framing your investment decisions in a context that makes sense to you.

On Simply Wall St’s Community page, millions of investors use Narratives to compare their fair value against the current share price and quickly spot if a stock looks compelling for their unique thesis. Narratives update dynamically as fresh news, earnings, and events come in, so your outlook always stays relevant.

For example, the most optimistic Narrative on Nebius Group forecasts a fair value of $166 per share, driven by recent multi-billion dollar contracts and capacity growth. The lowest puts fair value at $47, focusing on competition, capital risks, and expanding regulatory challenges.

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