Is It Too Late to Consider Ubiquiti After Its 2025 Share Price Surge?

• For investors wondering whether Ubiquiti is still worth considering after such a large run-up, or if the easy money has already been made, this section will break down what the current price really implies.
• The stock has crept up another 0.6% over the last week, 5.5% over the past month, and is now up 67.5% year to date and 65.4% over the last year, with gains of 115.2% over 3 years and 117.5% over 5 years.
• Much of this strength has been associated with ongoing enthusiasm around Ubiquiti’s role in wireless networking hardware and its asset light, high margin model, which some investors view as well positioned for long term connectivity trends. In addition, recurring attention from analysts and investors around its capital light operations and shareholder focused capital allocation has kept it on many growth oriented watchlists.
• Despite that backdrop, Ubiquiti currently scores just 0/6 on our valuation checks. Next we will look at traditional valuation approaches, then circle back at the end to a broader way of thinking about what this price may imply.

Ubiquiti scores just 0/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.

Approach 1: Ubiquiti Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow model estimates what a business is worth today by projecting the cash it can generate in the future and then discounting those cash flows back to their value in today's dollars.

For Ubiquiti, the latest twelve month free cash flow is about $587.5 Million. Using a 2 Stage Free Cash Flow to Equity model, Simply Wall St projects cash flows that initially decline, then stabilize and grow modestly. For example, forecast free cash flow is estimated at roughly $529.8 Million in 2026 and $528.4 Million by 2035, with the later years based on extrapolations after the first few analyst driven estimates.

When those projected cash flows are discounted back, the model arrives at an intrinsic value of about $142.38 per share. Compared with the current market price, this implies the shares are around 296.5% overvalued. This suggests the market is paying a steep premium relative to the cash flow outlook embedded in this DCF.

Result: OVERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Ubiquiti may be overvalued by 296.5%. Discover 914 undervalued stocks or create your own screener to find better value opportunities.

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

Approach 2: Ubiquiti Price vs Earnings

For consistently profitable companies like Ubiquiti, the price to earnings ratio is often the most intuitive way to judge valuation, because it links what investors are paying directly to the profits the business is generating today. In general, faster growing and lower risk businesses tend to justify a higher, or more expensive, PE multiple, while slower or riskier companies usually deserve a lower one.

Ubiquiti currently trades on a PE of about 43.1x, which is well above both the Communications industry average of around 32.0x and the broader peer average of roughly 32.5x. On the surface, that suggests the market is pricing in stronger growth or lower risk than the typical company in its space.

Simply Wall St’s Fair Ratio framework goes a step further by estimating what PE multiple would be reasonable for Ubiquiti specifically, based on its earnings growth profile, profitability, risk characteristics, industry and market cap. This approach is more tailored than a simple peer or industry comparison, because it adjusts for how Ubiquiti actually differs from those groups. For Ubiquiti, the Fair Ratio is 35.8x, meaning the current 43.1x multiple still looks elevated relative to what its fundamentals would normally justify.

Result: OVERVALUED

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1465 companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Ubiquiti Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives, a simple way to connect your view of a company with the numbers behind it. A Narrative is your story about Ubiquiti, where you spell out what you believe about its future revenue growth, margins and risks, and then turn that story into a concrete financial forecast and fair value estimate. Rather than relying only on static models like DCFs or PE comparisons, Narratives show you, on Simply Wall St’s Community page, how your assumptions translate into a fair value that you can directly compare to today’s share price to help inform your decisions. They update dynamically as new information comes in, so when earnings, news or guidance changes, your Narrative and its fair value move with it. For Ubiquiti, one investor might build a Narrative with conservative growth and see a far lower fair value, while another assumes stronger long term demand for wireless networking and arrives at a much higher valuation.

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