Polestar (NasdaqGM:PSNY) Valuation Revisited After a Sharp Short-Term Share Price Rebound

Polestar Automotive Holding UK (PSNY) has quietly bounced in the past week, even as the stock remains sharply lower over the past year, inviting a closer look at what the market is pricing in.

See our latest analysis for Polestar Automotive Holding UK.

The latest pop in Polestar’s share price, with a 7 day share price return of 36.89 percent off a depressed base, comes after a tough stretch that includes a 90 day share price return of minus 41.08 percent and a 3 year total shareholder return of minus 87.94 percent. Momentum is improving, but the long term picture still reflects heavy skepticism around execution and valuation.

If this rebound has you rethinking the EV space, it could be worth scanning other auto names using our screener for auto manufacturers to spot where sentiment and fundamentals line up more convincingly.

With shares still down heavily over three years but trading at a steep discount to analyst targets, the key debate now is simple: is Polestar undervalued after a bruising reset, or is the market correctly pricing in its future growth?

Most Popular Narrative Narrative: 43% Undervalued

With Polestar last closing at $17.18 versus a narrative fair value of $30.00, the valuation story leans optimistic on long term earnings power.

The anticipated continuation of high tariffs, mounting pricing pressure, and ongoing regulatory changes in major markets (notably the US), combined with a shift towards lower-priced EV segments in Europe, threaten to compress Polestar's average selling prices and gross margins, reducing future profitability. Intensifying competition from established automakers and new EV entrants with deeper pockets is expected to put downward pressure on Polestar's market share and limit its ability to scale volumes at a premium, challenging top-line revenue growth and net margins.

Read the complete narrative.

Want to see how this growth hungry forecast still lands on a restrained future earnings multiple and compressed margins assumptions? The full narrative unpacks the math.

Result: Fair Value of $30.00 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, Polestar’s accelerating sales growth and improving cost efficiencies could cushion margin pressure and support earnings, challenging the current undervalued narrative.

Find out about the key risks to this Polestar Automotive Holding UK narrative.

Build Your Own Polestar Automotive Holding UK Narrative

If you want to dig into the numbers yourself, examine these assumptions, and form your own view in just a few minutes, Do it your way.

A great starting point for your Polestar Automotive Holding UK research is our analysis highlighting 2 key rewards and 3 important warning signs that could impact your investment decision.

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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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