Assessing Volkswagen’s Value After Its Major Electric Vehicle Expansion News

Wondering if Volkswagen is a bargain or just fairly priced? If you are curious about what’s really driving its value, you are in the right place. The stock has drifted only slightly in the last week (down 0.3%), but it is up 4.4% year-to-date and has climbed 10.3% over the past year, suggesting a noticeable shift in sentiment. Recent headlines around Volkswagen’s major EV push and ongoing strategic partnerships have helped keep investors’ eyes on the company, feeding speculation about its growth roadmap. A string of product rollouts and updates has also kept market chatter focused on its ability to adapt in a changing auto landscape. Volkswagen currently earns a 5 out of 6 on our valuation score, reflecting favorability in most key checks. Next, we will examine what this means through the lens of different valuation approaches and reveal why there may be an even better way to spot value at the end of this article.

Volkswagen delivered 10.3% returns over the last year. See how this stacks up to the rest of the Auto industry.

Approach 1: Volkswagen Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow (DCF) model estimates a stock's value by projecting its future cash flows and discounting them back to the present using a suitable rate. This approach provides insight into how much value Volkswagen might generate for shareholders over the next decade, based on expected company performance.

Currently, Volkswagen’s trailing twelve-month Free Cash Flow stands at negative €10.94 billion, reflecting recent challenges. However, analysts anticipate significant improvement, with Free Cash Flow projected to rise to €14.16 billion by 2029. The projections extend even further, and by 2035, Simply Wall St estimates Free Cash Flow could reach €28.26 billion. Notably, only the first few years are based on analyst consensus, while later forecasts are extrapolated from underlying trends.

Based on the two-stage Free Cash Flow to Equity model, the estimated intrinsic value for Volkswagen stock is €458.83 per share. This is approximately 80.1% above the current share price, suggesting that the stock may be dramatically undervalued based on long-term cash generation potential.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Volkswagen is undervalued by 80.1%. Track this in your watchlist or portfolio, or discover 844 more undervalued stocks based on cash flows.VOW3 Discounted Cash Flow as at Nov 2025

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

Approach 2: Volkswagen Price vs Earnings (PE)

The Price-to-Earnings (PE) ratio is a widely used valuation metric for profitable companies like Volkswagen because it directly relates a company’s share price to its bottom line. It effectively captures how much investors are willing to pay for each euro of earnings, making it a straightforward way to gauge whether a stock looks cheap or expensive relative to its profit-generating power.

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Expectations for future growth and the perceived risk are key factors in determining an appropriate or "fair" PE ratio. Generally, higher expected earnings growth and lower risk justify a higher PE multiple, while lower growth or higher uncertainty warrant a lower one.

Volkswagen currently trades at a PE ratio of 6.8x. This is well below both the industry average of 18.0x and its typical peer, which averages 18.02x. At first glance, this steep discount could suggest that Volkswagen is undervalued compared to industry standards.

However, Simply Wall St’s proprietary Fair Ratio offers a more tailored benchmark by blending Volkswagen’s growth prospects, risk profile, margins, market capitalization, and its place within the auto sector. For Volkswagen, the Fair Ratio is calculated to be 17.8x. Because this measure incorporates more company-specific data and broader context, it provides a deeper and more accurate sense of value than standard industry comparisons alone.

Comparing the Fair Ratio of 17.8x to Volkswagen’s current PE of 6.8x highlights a significant discount. This suggests that the stock appears undervalued by this approach.

Result: UNDERVALUEDXTRA:VOW3 PE Ratio as at Nov 2025

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1410 companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Volkswagen Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let’s introduce you to Narratives. A Narrative is a simple, accessible way for investors to frame their own story about a company like Volkswagen, connecting personal perspectives and market context with assumptions about its fair value, future earnings, revenue growth, and profit margins.

On Simply Wall St’s Community page, where millions of investors contribute, Narratives make it easy to link your outlook or “story” for Volkswagen with a fully quantified financial forecast, so you can see how your expectations translate into a fair value estimate. You can then instantly compare that to today’s share price to help decide when to buy or sell.

Narratives are dynamic and update automatically whenever new information emerges, whether it is earnings results, macroeconomic news, or a shift in Volkswagen’s strategic direction. This keeps your investment thesis accurate and current.

For example, some investors believe Volkswagen is facing structural headwinds, assigning a fair value as low as €68.40 per share based on modest profit estimates and industry risks, while others see upside from its electrification strategy, using higher margin and revenue growth forecasts to support a fair value of €111.13 per share. The difference is the Narrative each person builds.

With Narratives, you can compare, create, and revise your own investment case, empowering better, more personal decision making every time you check Volkswagen’s valuation.

For Volkswagen, we’ll make it really easy for you with previews of two leading Volkswagen Narratives:

🐂 Volkswagen Bull Case

Fair Value: €111.13

Current price is 17.97% below this Narrative's fair value.

Forecast revenue growth: 2.97%

Volkswagen's expansion into electrified vehicles, partnerships, and premium-market focus is anticipated to support growth and margin recovery despite global pressures. Analysts expect revenue to grow, margins to improve, and earnings to nearly double within three years, using a discount rate of 9.81% to factor in risk. Key risks include international trade disputes and competition in electric vehicles. Analyst consensus sees 12.8% upside with a fair value of €111.13 per share.

🐻 Volkswagen Bear Case

Fair Value: €68.40

Current price is 33.39% above this Narrative's fair value.

Forecast revenue growth: 1.0%

Volkswagen is contending with legacy structural issues, fallout from past scandals, and a slow response to the EV transition, resulting in declining profits and muted growth. Dependence on China and operational missteps have left the company vulnerable to international pressures and market stagnation outside Germany. Recent delays in margin improvement targets and guidance cuts have increased skepticism about management's ability to steer the company back to sustained growth.

Do you think there's more to the story for Volkswagen? Head over to our Community to see what others are saying!XTRA:VOW3 Community Fair Values as at Nov 2025

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.

Companies discussed in this article include VOW3.DE.

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