Curious if Ford Motor’s stock is still offering real value after its recent run? Sometimes what looks cheap or expensive on the surface becomes far more interesting when you dig deeper.
The stock has surged 16.6% over the past month and is now up 37.8% year to date, making some investors wonder if the momentum can keep going or if risk levels have shifted.
Recent headlines about Ford’s advancements in electric vehicle production and strategic partnerships on new digital features have fueled optimism. Analysts note the company’s commitment to future-focused growth, and there is a sense in the market that Ford is leaning into innovation rather than just riding out legacy business cycles.
Right now, Ford scores a 3 out of 6 on our valuation checks, so there is more to the story than meets the eye. Next, we’ll dig into how these valuation approaches work. Stick around for the end for an even more insightful way to understand whether the stock is really worth your money.
The Discounted Cash Flow (DCF) model estimates the true value of a company by projecting its future cash flows and then discounting those back to today, reflecting the time value of money. This approach helps investors see what the company’s future ability to generate cash is really worth right now.
Ford Motor’s most recent twelve months of Free Cash Flow (FCF) totaled $11.7 billion. Analysts currently provide detailed forecasts for up to five years, but for the years beyond that, future cash flow projections are extrapolated. For example, Ford’s FCF is expected to be around $5.1 billion in 2026 and $5.8 billion in 2027. By 2035, projections see FCF falling closer to $2.9 billion as growth rates moderate in the long-term outlook.
Running these projections through a DCF model results in an estimated intrinsic value of $8.12 per share for Ford. Based on this calculation, Ford’s stock appears to be 63.8% overvalued compared to its current share price.
The Price-to-Earnings (PE) ratio is one of the most popular yardsticks for valuing profitable companies like Ford Motor. It reflects how much investors are willing to pay per dollar of earnings, making it especially relevant for established businesses generating consistent profits.
Of course, what counts as a “normal” or “fair” PE ratio depends on more than just profits. Usually, companies with higher growth prospects or lower risks can justify a higher PE, while cyclical or riskier companies tend to trade at a discount. That is why it is useful to look at Ford’s current PE in context.
Ford is currently trading at a PE of 11.3x. This is well below both the auto industry average of 18.3x and the 22.8x seen among key peers. At first glance, that might suggest the stock is undervalued compared to its sector and competitors.
But to get a more nuanced view, we use Simply Wall St’s proprietary “Fair Ratio,” which in this case is 17.2x. Unlike basic industry or peer averages, the Fair Ratio factors in Ford’s actual profit margins, forecast growth, risk profile, market cap, and where it sits within the automotive landscape. This approach aims to show what PE the market could fairly assign based on the company’s particular realities.
Comparing Ford’s actual PE (11.3x) to its Fair Ratio (17.2x) signals that the stock is attractively priced and currently undervalued on this measure.
Earlier we mentioned that there is an even better way to understand valuation. Let’s introduce you to Narratives. A Narrative is more than just a number; it is your story or perspective on Ford Motor, backed by your estimates of future revenue, profit margins, and a fair value you believe is justified based on the company’s strengths, risks, and outlook.
Narratives connect the dots between what Ford is doing in the real world, how that should show up in financial results, and whether the stock price truly reflects your expectations for the business. With Simply Wall St, anyone can easily create a Narrative on the Community page, making advanced valuation assessments accessible to all investors, not just the experts.
By comparing your Narrative’s Fair Value to the current market Price, you gain simple, actionable insight into whether it is the right time to buy, hold, or sell. Narratives also update in real time, so if new earnings reports, news stories, or regulatory changes are released, your assumptions and valuations are instantly refreshed.
For example, using the latest analyst Narratives for Ford Motor, the highest fair value perspective is $16.00 per share (optimistic about recurring digital revenues and EV strategy), while the lowest is $8.00 (worried about cost pressures and legacy challenges). Which story matches your view?
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.
