<div id="readability-page-1"><div><ul> <li>If you are wondering whether AB Volvo is still attractively priced after a strong run, starting with the current share price of SEK330.60 can help frame expectations around value and risk.</li> <li>The stock has returned 3.9% over the last 7 days, 7.1% over the last 30 days, 11.0% year to date and 32.4% over the past year, with longer term returns of 90.5% over 3 years and 117.8% over 5 years.</li> <li>Recent coverage has focused on AB Volvo's position in capital goods and how investors are reacting to its longer term performance and balance sheet profile. This context helps explain why the stock's return profile has attracted fresh attention from both new and existing shareholders.</li> <li>On Simply Wall St's valuation checklist, AB Volvo scores 5 out of 6, so it can be useful to see how that stacks up across P/E based comparisons, asset based models and cash flow based approaches, before looking at one more way to think about valuation at the end of this article.</li> </ul> AB Volvo delivered 32.4% returns over the last year. See how this stacks up to the rest of the Machinery industry. <h3>Approach 1: AB Volvo Discounted Cash Flow (DCF) Analysis</h3> The Discounted Cash Flow model estimates what a stock could be worth by projecting future cash flows and discounting them back to today, so you can compare that value with the current share price. For AB Volvo, the model uses a 2 Stage Free Cash Flow to Equity approach, starting with last twelve month free cash flow of about SEK29.9b. Analyst and extrapolated projections then extend out ten years, with forecast free cash flow of SEK54.3b in 2030 and further estimated figures through 2035. Each of these future cash flows is discounted back to a present value using Simply Wall St's assumptions. Putting these cash flows together gives an estimated intrinsic value of SEK468.06 per share. Against the current share price of SEK330.60, the DCF suggests the stock is trading at a 29.4% discount, which indicates AB Volvo appears undervalued on this cash flow based view. Result: UNDERVALUED Our Discounted Cash Flow (DCF) analysis suggests AB Volvo is undervalued by 29.4%. Track this in your watchlist or portfolio, or discover 221 more high quality undervalued stocks. <figure><img height="476" src="https://imageproxy.pbkrs.com/https://images.simplywall.st/company/c5a2f76f-73ce-454e-b119-4dedbd39bd34/chart/dcf/query-ZGF0ZT0yMDI2LTA1LTA3?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" width="746" original-src="https://imageproxy.pbkrs.com/https://images.simplywall.st/company/c5a2f76f-73ce-454e-b119-4dedbd39bd34/chart/dcf/query-ZGF0ZT0yMDI2LTA1LTA3"/><figcaption>VOLV B Discounted Cash Flow as at May 2026</figcaption></figure> Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for AB Volvo. <h3>Approach 2: AB Volvo Price vs Earnings</h3> For a profitable company like AB Volvo, the P/E ratio is a straightforward way to relate what you pay per share to the earnings that each share generates. It helps you see how much the market is currently willing to pay for those earnings. What counts as a “normal” or “fair” P/E depends on how the market views a company’s growth potential and risk. Higher expected growth or lower perceived risk can justify a higher P/E, while slower growth or higher risk typically supports a lower P/E. AB Volvo currently trades on a P/E of 20.45x. That sits below the Machinery industry average P/E of 26.65x and also below the peer group average of 38.33x. Simply Wall St’s Fair Ratio for AB Volvo is 38.92x, which is a proprietary estimate of the P/E that could be expected given factors like earnings growth, industry, profit margins, market size and key risks. This Fair Ratio can be more useful than a simple peer or industry comparison because it adjusts for these company specific characteristics. Since AB Volvo’s current P/E of 20.45x is meaningfully below the Fair Ratio of 38.92x, the stock screens as undervalued on this earnings based view. Result: UNDERVALUED <figure><img height="476" src="https://imageproxy.pbkrs.com/https://images.simplywall.st/company/c5a2f76f-73ce-454e-b119-4dedbd39bd34/chart/pe-multiple-vs-industry/query-ZGF0ZT0yMDI2LTA1LTA3?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" width="746" original-src="https://imageproxy.pbkrs.com/https://images.simplywall.st/company/c5a2f76f-73ce-454e-b119-4dedbd39bd34/chart/pe-multiple-vs-industry/query-ZGF0ZT0yMDI2LTA1LTA3"/><figcaption>OM:VOLV B P/E Ratio as at May 2026</figcaption></figure> P/E ratios tell one story, but what if the real opportunity lies elsewhere? Start investing in legacies, not executives. Discover our 101 top founder-led companies. <h2>Upgrade Your Decision Making: Choose your AB Volvo Narrative</h2> Earlier it was mentioned that there is an even better way to understand valuation. Think of Narratives as your way to attach a clear story to the numbers for AB Volvo, where you set assumptions for fair value, future revenue, earnings and margins, link that story to a forecast, then compare the resulting fair value with the current price. All of this happens inside Simply Wall St’s Community page, where you can see in real time how that story is updated when new news or earnings arrive. You can lean closer to a more optimistic view with a fair value of about SEK385 per share, or a more cautious view closer to SEK262. Each Narrative gives you a structured, easy to use reference point for deciding how the stock fits your own plan. For AB Volvo however we'll make it really easy for you with previews of two leading AB Volvo Narratives: 🐂 AB Volvo Bull Case Narrative fair value: SEK438.80 Implied undervaluation vs last close: 24.6% Revenue growth assumption: 5% <ul> <li>The bullish view highlights AB Volvo's push into electric trucks and buses, aftermarket services and autonomous and AI enabled fleet solutions as key long term drivers.</li> <li>It points to regulatory support for low emission transport and digital fleet management as helpful tailwinds, while still flagging cyclical demand, new EV competitors and raw material costs as important risks.</li> <li>The narrative assumes AB Volvo shifts further toward higher margin software and subscription services, which supports a higher fair value estimate than the current share price.</li> </ul> 🐻 AB Volvo Bear Case Narrative fair value: SEK270.00 Implied overvaluation vs last close: 22.4% Revenue growth assumption: 8.27% <ul> <li>The more cautious view anchors on a fair value of SEK270, focusing on modest revenue growth, supply chain pressures and wider auto sector uncertainty.</li> <li>It still highlights AB Volvo's focus on electric vehicles, autonomous driving technology and dividends, but suggests these positives are already well reflected above the narrative fair value.</li> <li>The narrative frames AB Volvo as a solid dividend payer with growth potential, yet one where investors may want to compare the current price with this lower fair value estimate before making a decision.</li> </ul> Together, these Narratives give you a clear range for how other investors are thinking about AB Volvo's value and growth assumptions, so you can decide which story lines up better with your own expectations. To see how these results tie into long-term growth, risks, and valuation, check out the full range of community narratives for AB Volvo on Simply Wall St. Add the company to your watchlist or portfolio so you'll be alerted when the story evolves. Do you think there's more to the story for AB Volvo? Head over to our Community to see what others are saying! <figure><img height="476" src="https://imageproxy.pbkrs.com/https://images.simplywall.st/company/c5a2f76f-73ce-454e-b119-4dedbd39bd34/chart/quote-price/query-ZGF0ZT0yMDI2LTA1LTA3?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" width="746" original-src="https://imageproxy.pbkrs.com/https://images.simplywall.st/company/c5a2f76f-73ce-454e-b119-4dedbd39bd34/chart/quote-price/query-ZGF0ZT0yMDI2LTA1LTA3"/><figcaption>OM:VOLV B 1-Year Stock Price Chart</figcaption></figure> 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.<div><h3>New: Manage All Your Stock Portfolios in One Place</h3>We've created the ultimate portfolio companion for stock investors, and it's free.• Connect an unlimited number of Portfolios and see your total in one currency • Be alerted to new Warning Signs or Risks via email or mobile • Track the Fair Value of your stocks Try a Demo Portfolio for Free</div></div></div>

VLVLY

AB Volvo's stock, currently priced at SEK330.60, has shown strong returns of 32.4% over the past year and is considered undervalued by 29.4% based on a Discounted Cash Flow analysis. The company's P/E ratio of 20.45x is below the industry average of 26.65x, indicating further undervaluation. Analysts suggest that AB Volvo's fair value could range from SEK262 to SEK385 per share, depending on growth assumptions. Investors are encouraged to consider these valuations when deciding on potential investments in AB Volvo.

Is It Too Late To Consider Buying Volvo (OM:VOLV B) After Its Strong Multi Year Run?