Is It Too Late To Consider Enviri (NVRI) After A 94% One Year Rally?
- Some investors may be wondering if Enviri at around US$18.28 is still offering value after a strong run, or if most of the upside has already been priced in.
- The stock has posted a 93.6% return over the past year and 138.3% over three years, with more muted moves of a 1.4% decline over the last 7 days, a 0.4% gain over 30 days, and a 2.1% return year to date.
- Recent coverage has focused on Enviri's progress as an NYSE listed environmental services business and its efforts to refine its portfolio and operations. This helps frame how investors think about risk and reward at current prices. News around its positioning in commercial services and environmental solutions has also kept attention on whether the current share price fairly reflects those developments.
- On our checks, Enviri scores a 5/6 valuation rating, suggesting it screens as undervalued on most of the metrics we use. Next we will walk through those different valuation approaches before finishing with a way to look at valuation that goes beyond a single score.
Approach 1: Enviri Discounted Cash Flow (DCF) Analysis
A Discounted Cash Flow model takes projected future cash flows, then discounts them back to today to estimate what the business could be worth right now. It is essentially asking what those future dollars are worth in today’s terms.
For Enviri, the latest twelve month free cash flow is a loss of $33.3 million. Analysts have provided free cash flow estimates out to 2027, with 2027 projected at $37.4 million. Beyond that, Simply Wall St extrapolates cash flows further. The model extends to 2035 using a 2 Stage Free Cash Flow to Equity approach.
Using these cash flow projections, the model arrives at an estimated intrinsic value of about $51.98 per share. Compared with the current share price of around $18.28, the DCF output suggests the shares are trading at a 64.8% discount to this intrinsic estimate, which screens as materially undervalued on this methodology.
Result: UNDERVALUED
Our Discounted Cash Flow (DCF) analysis suggests Enviri is undervalued by 64.8%. Track this in your watchlist or portfolio, or discover 873 more undervalued stocks based on cash flows.
Approach 2: Enviri Price vs Sales
P/S is often a useful yardstick for companies where revenue is a clearer anchor than current earnings, especially in sectors like commercial services and environmental solutions where profits can be affected by one off items or reinvestment.
In general, the higher the expected growth and the lower the perceived risk, the higher the P/S ratio investors may be willing to pay. Slower growth or higher risk usually call for a lower, more conservative multiple.
Enviri currently trades on a P/S of 0.66x. That sits below the Commercial Services industry average P/S of 1.24x and also below the peer group average of 1.34x. Simply Wall St’s Fair Ratio for Enviri, which estimates an appropriate P/S based on factors such as revenue growth, margins, risks, market cap and industry, comes out at 0.68x.
This Fair Ratio can be more informative than a simple peer or industry comparison because it tries to tailor the multiple to Enviri’s own profile rather than assuming it should match the group.
With the current P/S of 0.66x sitting just under the Fair Ratio of 0.68x, Enviri screens as undervalued on this metric.
Result: UNDERVALUED
P/S ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1443 companies where insiders are betting big on explosive growth.
Upgrade Your Decision Making: Choose your Enviri Narrative
Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives. On Simply Wall St, a Narrative is your story for a company, where you set your assumptions for future revenue, earnings and margins, link those to a financial forecast, and arrive at your own view of fair value. Instead of just accepting a single number, you connect what you believe about Enviri’s business to a set of projections, which the platform then turns into a fair value that you can compare with the current share price to help inform your own decision on whether the stock suits your portfolio. Narratives are available on the Community page, used by millions of investors, and they update automatically when new information, like earnings reports or major news, is added. For Enviri, one investor might build a Narrative that points to a much higher fair value than US$18.28, while another might create a more cautious Narrative that supports a fair value closer to the current price.
Do you think there's more to the story for Enviri? 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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