Is the Recent BYD Share Price Slide an Opportunity or a Warning for 2025?

Ever wondered if BYD stock is actually a bargain or if it's already priced for perfection? You're not alone. This article is here to help you find out. While BYD has delivered a 6.5% gain over the past year and stands up an impressive 66.8% over five years, its recent dips of -2.7% this week and -11.2% over the last month signal the market is rethinking its outlook. News around shifts in electric vehicle policy and competitive dynamics among Chinese automakers are swirling, adding volatility to BYD’s share price. Investors are paying close attention to updates on expansion plans, regulatory changes, and government incentives that could give BYD an edge or challenge its momentum. The stock currently clocks a valuation score of 3 out of 6, suggesting it's undervalued on half of the key metrics we track. Up next, we break down how analysts typically value BYD. Stay tuned for an even more insightful approach to valuation that could change how you see the stock.

Find out why BYD's 6.5% return over the last year is lagging behind its peers.

Approach 1: BYD Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow (DCF) model estimates a company's intrinsic value by forecasting its future cash flows and then discounting those projected amounts back to today's value. This helps investors judge what a business could be worth based on how much free cash it can generate over the coming years.

For BYD, the latest data shows the company's last twelve months Free Cash Flow stood at a negative CN¥29.1 Billion. Despite this challenging base, analyst projections show an aggressive turnaround, with Free Cash Flow expected to reach CN¥78.4 Billion by 2027 and further growing to about CN¥125.2 Billion by 2035, based on both analyst forecasts and extrapolations. Notably, these projections use estimates for the first five years and apply a reasonable growth curve for the remainder of the next decade.

When all these expected cash flows are discounted back to present value, the DCF model arrives at an estimated intrinsic value of HK$132.98 per share. This figure suggests the stock is trading at a 26.4% discount to its calculated fair value, indicating that, based on cash flow fundamentals, BYD is currently undervalued.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests BYD is undervalued by 26.4%. Track this in your watchlist or portfolio, or discover 876 more undervalued stocks based on cash flows.1211 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 BYD.

Approach 2: BYD Price vs Earnings

The Price-to-Earnings (PE) ratio is a widely used valuation measure, particularly appropriate for profitable companies like BYD, because it helps investors quickly gauge how much they are paying for each dollar of earnings. A higher PE can reflect higher expected growth or a lower perceived risk, while a lower PE may hint at more limited upside or greater uncertainty.

Story Continues

BYD’s current PE ratio stands at 21.3x. For context, this is above the auto industry average of 18.0x and notably higher than the peer average of 9.1x. At first glance, the stock looks expensive compared to its sector and competitors. However, simple comparisons can miss the nuances that drive fair value. Factors like profit margins, scale, long-term outlook, and market-specific risks all play a role.

That is where Simply Wall St’s “Fair Ratio” steps in. This proprietary metric, calculated at 17.2x for BYD, accounts for the company’s expected earnings growth, profitability, industry positioning, and risk profile. Unlike a basic peer or industry average, the Fair Ratio focuses on what a reasonable multiple should be for BYD specifically, given all the signals investors care about most. Comparing the Fair Ratio with BYD's current PE of 21.3x suggests the stock is a bit more expensive than its fundamentals warrant, landing it in overvalued territory.

Result: OVERVALUEDSEHK:1211 PE Ratio as at Nov 2025

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1404 companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your BYD Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let’s introduce you to Narratives. A Narrative is simply your story behind the numbers, your assumptions about BYD’s future revenue, profit margins, and what you believe is a fair value, all tied to your outlook on where the company is headed.

Narratives connect a company’s story to a tailored financial forecast and, ultimately, to a fair valuation that fits your investment perspective. They are designed to be accessible for everyone and are integrated right into Simply Wall St’s Community page, where millions of investors can share and discover different viewpoints.

By creating or adopting a Narrative, you can compare its Fair Value to BYD’s latest Price to decide whether now is the right time to buy or sell. Narratives update dynamically as new information, such as breaking news or earnings releases, becomes available, ensuring your thinking keeps pace with the market.

For instance, some investors use optimistic forecasts and arrive at a much higher Fair Value for BYD than others who anticipate more challenges and set their Fair Value lower, all within the same platform and in real time.

Do you think there's more to the story for BYD? Head over to our Community to see what others are saying!SEHK:1211 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 1211.HK.

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