Stellantis (BIT:STLAM) Stock May Stay Cheap On Its Free2Move Sale

Stellantis stock is coming off a tough three year stretch, with the share price down about 67.7%. Yet the company still screens as cheap on a broad set of valuation checks. Recent portfolio moves and leadership changes raise the question of whether the market is assigning too steep a discount to the business.

• Over the last 3 years, Stellantis shareholders have seen the stock decline about 67.7%, which points to a deep reset in market expectations.
• The planned sale of the Free2Move car sharing unit and Opel's new manufacturing push in Algeria may support a tighter focus on core operations. At the same time, execution risk around brand repositioning and international expansion can weigh on how investors price the stock.
• Stellantis currently passes 5 of 6 valuation checks, which suggests the broader assessment leans cheap on metrics like earnings, cash flow and assets compared with the current share price.

The issue now is whether Stellantis' weak share price performance already reflects these risks or if the stock is still pricing in more trouble than the fundamentals justify.

Find out why Stellantis' -38.7% return over the last year is lagging behind its peers.

Is Stellantis a Bargain on Sales?

The price-to-sales (P/S) ratio is a useful way to look at Stellantis because it ties the stock price directly to the revenue the company is already generating.

Right now Stellantis trades on a P/S ratio of about 0.1x, compared with an auto industry average of about 0.6x and a peer average of about 2.9x. The fair P/S ratio from the model sits at about 0.4x, which is still below peers but higher than where the stock trades today. That gap indicates the market currently values each euro of Stellantis revenue at a steep discount to what would be expected based on its size, margins profile and risk factors.

Despite the planned sale of the Free2Move car sharing business and the focus on core manufacturing, the current P/S multiple still prices Stellantis below the level indicated by this fair ratio framework.

On the P/S multiple, Stellantis stock appears undervalued relative to both industry norms and the modelled fair ratio.

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

The Stellantis Narrative: What Would Justify Today's Price?

Simply Wall St Narratives pick up where the Stellantis valuation puzzle leaves off and spell out what kind of growth, margin profile and earnings path would need to play out for the stock to be worth materially more or less than today’s price on the Community page. Instead of relying on a single multiple or model point estimate, each scenario sets out its own fair value assumptions so you can compare them with Stellantis' actual results over time.

The community is split on Stellantis, with one camp seeing deep value and another focused on long term pressure on margins.

Bull case: 55% undervalued

"Stellantis is uniquely placed to monetize next-generation connected vehicle platforms and digital mobility services, leveraging STLA Brain and high-profile software partnerships to generate high-margin recurring revenue..."

Read the full Bull Case to see why Stellantis could be undervalued

Bear case: 27% overvalued

"Stellantis' heavy reliance on internal combustion engine vehicles, particularly in North and Latin America, puts it at a structural disadvantage as emissions regulations and consumer preferences shift rapidly toward electric vehicles worldwide..."

Read the full Bear Case to see why Stellantis could be overvalued

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

The Bottom Line

Stellantis still screens as undervalued on market multiples, with the current P/S ratio sitting well below the fair ratio framework. That puts the focus on whether the discount reflects temporary pessimism or deeper concern about execution on brand repositioning and international growth. The tension between a cheap valuation and real operational risks is what may matter most from here. The crux for investors is whether Stellantis can demonstrate that its core manufacturing focus and portfolio shifts support resilient margins and cash generation, rather than a value trap that remains discounted.

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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