Voya Financial has delivered a 64.2% share price gain over the past five years, yet current valuation checks suggest the stock now looks closer to fairly priced than clearly cheap. That backdrop is playing out just as an activist investor challenges the board and management, putting extra focus on what the current price implies for future returns.

• Over five years, Voya Financial has returned 64.2%, which means recent shareholders are now deciding whether the current level still offers an appealing entry point.
• Winning the District of Columbia retirement plan mandate may support longer term earnings and cash flow expectations, while the no-confidence campaign from TOMS Capital Investment Management introduces governance and strategic uncertainty that can affect how investors value the stock.
• Voya Financial scores 4 out of 6 on the value checks, which points to a mixed picture rather than a clear bargain or clear overvaluation.

The issue now is whether Voya Financial's recent share price leaves enough upside against its intrinsic value estimate to justify the risk around the ongoing activist pressure.

Voya Financial delivered 34.1% returns over the last year. See how this stacks up to the rest of the Diversified Financial industry.

Does Voya Financial Look Fairly Valued on Excess Returns?

The Excess Returns model estimates what Voya Financial can earn on its equity above the required return over time. For Voya, the inputs point to a business generating returns modestly above its cost of capital rather than extremely high or weak returns.

The model uses a Book Value of $51.72 per share and a Stable EPS of $6.60 per share, based on the median return on equity over the past 5 years. Against a Cost of Equity of $4.67 per share, this implies an Excess Return of $1.93 per share and an Average Return on Equity of 11.52%. Stable Book Value is set at $57.27 per share from weighted future estimates, which supports an Excess Returns intrinsic value of about $100.59 per share. Compared with the current share price, that points to roughly a 2.5% discount, so Voya Financial appears only slightly cheap rather than deeply mispriced.

The no-confidence campaign from TOMS Capital Investment Management helps explain why the share price may be sitting a little below what the Excess Returns model supports, despite the implied value premium over the cost of equity.

Overall, the Excess Returns analysis suggests Voya Financial stock is close to fairly valued, with only a mild indication of undervaluation.

Voya Financial is fairly valued according to our Excess Returns, but this can change at a moment's notice. Track the value in your watchlist or portfolio and be alerted on when to act.

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

Is Voya Financial Fairly Priced on Earnings?

The P/E ratio is the main yardstick for Voya Financial because earnings are a key driver for this type of diversified financial business. The stock trades on a P/E of about 15.7x, which is slightly below both the company specific fair P/E of 16.6x and the broader diversified financial industry average of around 17.5x.

That fair P/E reflects what investors might expect to pay for Voya Financial given its profitability profile, risk, and size. The current market price is therefore a little under that reference point, but not by a wide margin. Compared with a peer group average P/E of 59.5x, Voya Financial also appears more conservatively valued, although that peer figure is skewed higher and does not on its own set a target for this stock.

Overall, Voya Financial appears to be priced at roughly a fair level on its P/E multiple, with only a modest discount to the modelled fair ratio.

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

The Voya Financial Narrative: What Would Justify Today's Price?

Simply Wall St Narratives pick up where the valuation checks leave off for Voya Financial. Each Narrative describes the future path for Voya Financial's growth, margins and earnings that would need to occur for the stock to be worth materially more or materially less than today's price. Rather than relying on a single multiple or model, it explains the assumptions behind its view of fair value so you can compare them to actual results over time.

Community views on Voya Financial are split, with some investors seeing limited upside from here while others think the story is still underappreciated.

Bull case: 7% undervalued

"Analysts expect earnings to reach $1.1 billion (and earnings per share of $12.67) by about August 2029, up from $567.0 million today..."

Read the full Bull Case to see why Voya Financial could be undervalued

Bear case: 24% overvalued

"Reliance on elevated Stop Loss pricing, including approximately 24% rate increases on the 2026 book, could be difficult to sustain if medical trend moderates..."

Read the full Bear Case to see why Voya Financial could be overvalued

Do you think there's more to the story for Voya Financial? Head over to our Community to see what others are saying!

The Bottom Line

For Voya Financial, the Excess Returns intrinsic value estimate and the current P/E multiple both point to a stock that looks roughly fairly valued with only a slight hint of undervaluation. The broader valuation checks also read as mixed rather than clearly cheap or expensive, so the price today already reflects a fair amount of what is currently known.

The real swing factor from here is whether Voya Financial can translate its current profitability profile into consistently strong excess returns on equity while addressing the governance and execution questions raised by the activist campaign. That will determine whether the small apparent discount is an opportunity or simply compensation for those risks.

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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Disclaimer:This article represents the opinion of the author only. It does not represent the opinion of Webull, nor should it be viewed as an indication that Webull either agrees with or confirms the truthfulness or accuracy of the information. It should not be considered as investment advice from Webull or anyone else, nor should it be used as the basis of any investment decision.