Tuya (NYSE:TUYA) Valuation in Focus After Q2 Earnings Jump and Special Dividend Announcement

If you’re looking at Tuya (NYSE:TUYA) right now and wondering whether it’s time to make a move, you’re definitely not alone. The company just reported its second quarter results, with both sales and profits jumping compared to last year. On top of that, Tuya announced a special cash dividend, which is usually a sign that management feels good about where the business stands and wants to share some of that confidence with investors.

This upbeat news follows a year where Tuya’s share price has gained 92%, and momentum has accelerated in recent months. The strong earnings and special dividend appear to have reassured markets about Tuya’s financial footing, highlighting a story that’s been building since early this year. These announcements add to the sense that management is focusing on growth, efficiency, and a forward-looking AI strategy.

So with shares putting in a strong showing recently, is Tuya now trading at a bargain, or is all that growth already reflected in the price?

Most Popular Narrative: 22% Undervalued

According to the most widely followed narrative, Tuya is currently undervalued by 22% based on forecasted earnings and profit margin expansion over the next few years.

Accelerating integration of AI capabilities in nearly all shipped product categories along with robust developer engagement signal Tuya's ability to capitalize on the shift toward autonomous, intelligent IoT devices. This likely supports higher revenue growth, increased platform stickiness, and margin expansion as AI solutions become core to customer offerings.

Ready to uncover what’s really fueling this bullish view? The narrative hinges on ambitious forecasts for revenue growth and higher margins, all backed by bold future multiples. Want to understand the secret sauce behind that double-digit fair value gap? Take a closer look at the numbers and see what makes Tuya’s story stand apart from the crowd.

Result: Fair Value of $3.32 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent global trade uncertainties and growing competition could quickly change the outlook. This may make Tuya's path to sustained growth far less certain.

Find out about the key risks to this Tuya narrative.

Another View: Multiples Tell a Different Story

Looking at things from a different angle, the market’s favoured pricing ratio makes Tuya look pricier than most of its industry. This raises the question: is the growth outlook enough to justify paying up?

See what the numbers say about this price — find out in our valuation breakdown.

Stay updated when valuation signals shift by adding Tuya to your watchlist or portfolio. Alternatively, explore our screener to discover other companies that fit your criteria.

Build Your Own Tuya Narrative

If you see things differently or want to dig into the numbers yourself, you can quickly build your own narrative from scratch in just a few minutes, and Do it your way.

A great starting point for your Tuya research is our analysis highlighting 3 key rewards and 1 important warning sign 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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