- If you are wondering whether American Superconductor's current share price lines up with its underlying worth, this article will walk you through what the numbers actually say.
- The stock most recently closed at US$29.26, with a 7 day return of a 5.1% decline, a 30 day return of an 8.2% decline, a year to date return of a 7.3% decline, and a 1 year return of 57.0%, along with a very large 3 year return and a 5 year return of 27.8%.
- These moves sit against a backdrop of ongoing interest in power grid and clean energy related equipment. Investors often pay close attention to companies supplying technologies that can support grid stability and efficiency. For American Superconductor, this context helps explain why sentiment around the shares can shift quickly when new contracts, regulatory updates, or sector level developments hit the headlines.
- On our framework, American Superconductor currently scores 3 out of 6 on undervaluation checks, giving it a valuation score of 3. Next we will look at how different valuation methods treat the stock, before finishing with a way of thinking about value that goes beyond any single model.
Find out why American Superconductor's 57.0% return over the last year is lagging behind its peers.
Approach 1: American Superconductor Discounted Cash Flow (DCF) Analysis
A Discounted Cash Flow, or DCF, model projects a company’s future cash flows and then discounts those projected amounts back to today’s dollars to estimate what the business might be worth right now.
For American Superconductor, the model uses Free Cash Flow to Equity. The latest twelve month free cash flow is about $17.1 million. Analyst inputs are provided out to 2028, with future free cash flow for the year to March 2028 of $33.9 million, and further years are extrapolated by Simply Wall St, rather than based on additional analyst forecasts.
Putting all those projected cash flows together and discounting them back to today gives an estimated intrinsic value of around $15.88 per share. At the most recent share price of $29.26, the DCF output suggests the stock is around 84.3% overvalued on this model.
Result: OVERVALUED
Our Discounted Cash Flow (DCF) analysis suggests American Superconductor may be overvalued by 84.3%. Discover 48 high quality undervalued stocks or create your own screener to find better value opportunities.
Approach 2: American Superconductor Price vs Earnings
For profitable companies, the P/E ratio is a useful way to think about value because it links what you pay for each share directly to the earnings that the business is currently generating. It gives you a simple, earnings based snapshot of how the market is pricing the company today.
What counts as a “normal” P/E often reflects how quickly earnings are expected to grow and how risky those earnings are. Higher expected growth and lower perceived risk can justify a higher P/E, while slower growth or higher risk tend to support a lower P/E.
American Superconductor currently trades on a P/E of 10.68x. That sits well below the Electrical industry average of 32.33x and the peer average of 35.46x. Simply Wall St also calculates a proprietary “Fair Ratio” of 15.98x for American Superconductor. This Fair Ratio is designed to be more tailored than a simple industry or peer comparison because it considers the company’s earnings growth profile, profit margins, size, industry, and a range of risk factors together.
Comparing the current P/E of 10.68x with the Fair Ratio of 15.98x describes the shares as trading below where this framework would place them.
Result: UNDERVALUED
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Upgrade Your Decision Making: Choose your American Superconductor Narrative
Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives. In a Narrative you spell out your story for American Superconductor, link it to specific forecasts for revenue, earnings and margins, and translate that into a Fair Value you can compare with the current price on the Simply Wall St Community page, which is used by millions of investors.
Each Narrative connects what you believe about the business to a live model. When new information such as earnings guidance or data center news arrives, your Fair Value updates automatically and you can quickly see whether the gap between price and value still supports holding, adding, or trimming your position.
For example, one American Superconductor Narrative might follow the higher Fair Value of about US$68.00, with revenue assumptions around 19.8% annual growth, profit margins of 10.1% and a future P/E of 106.9x. Another might lean toward the lower Fair Value near US$49.00, with 18.2% revenue growth, 12.2% profit margins and a future P/E of 66.0x. Your task is to decide which story, if either, best matches your own expectations.
Do you think there's more to the story for American Superconductor? 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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