Is There an Opportunity in COFACE After Solid 2024 Earnings and Recent Price Pullback?

If you are eyeing COFACE stock and wondering whether this is your moment to act, you are far from alone. The past year has rewarded long-term holders with a remarkable 15.9% gain, and if you zoom out, the five-year return is an astonishing 256.4%. Sure, there have been some bumps lately; the price dipped by 3.9% over the past month and slipped 2.6% in just the last week. These moves often reflect shifting market perceptions and evolving risk appetites, especially as broader economic signals and financial sector sentiment keep swinging.

For many investors, volatility like this raises questions. Is this stock now trading at a bargain relative to its true worth, or have risks started to outweigh the potential rewards? That is where a valuation check becomes essential. In fact, COFACE currently scores 4 out of 6 in our valuation assessment, meaning it is undervalued on four of the six key criteria we use for this analysis.

Up next, I will break down the main valuation approaches and what they reveal about COFACE’s current price. And if you stick with me until the end, I will share an even more insightful way to think about value in the context of today’s market.

Why COFACE is lagging behind its peers

Approach 1: COFACE Excess Returns Analysis

The Excess Returns model evaluates how much value a company creates over and above the required return expected by shareholders. For COFACE, this approach centers on the company’s ability to generate returns from its core equity capital above the cost of equity. By focusing on the underlying profitability of the business relative to what investors demand, the model provides a clear lens on sustainable value creation.

COFACE’s latest figures are telling. The Book Value stands at €14.05 per share, with a Stable Earnings Per Share (EPS) of €1.72, calculated using the median Return on Equity over the last five years. The company’s Cost of Equity is €1.18 per share. This means that each year, after compensating shareholders for risk, COFACE generates an Excess Return of €0.54 per share. The Average Return on Equity over this period is a healthy 11.90%. Analyst projections indicate a Stable Book Value of €14.45 per share in the future.

By discounting these future excess returns, the model estimates an intrinsic value of €23.06 per share. With the stock currently trading about 33.1% below this value, COFACE appears significantly undervalued according to this methodology.

Result: UNDERVALUED

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for COFACE.

Story Continues COFA Discounted Cash Flow as at Sep 2025 Our Excess Returns analysis suggests COFACE is undervalued by 33.1%. Track this in your watchlist or portfolio, or discover more undervalued stocks.

Approach 2: COFACE Price vs Earnings

The Price-to-Earnings (PE) ratio is often the go-to valuation metric for profitable firms like COFACE, as it directly relates the share price to earnings generated per share. This makes it especially relevant for companies with a steady track record of profits, allowing investors to gauge whether the current price reflects reasonable expectations for future growth and risk.

Market expectations play a pivotal role in determining what is considered a "normal" or "fair" PE ratio. Higher growth prospects and lower risk profiles typically support higher PE multiples, while slower growth or more uncertainty can push them lower. For COFACE, the current PE is 9.47x. This is noticeably below both the Insurance industry average of 12.38x and the broader peer group average of 23.77x, indicating a marked discount according to traditional benchmarks.

Simply Wall St's proprietary "Fair Ratio" offers an even sharper perspective. Calculated at 8.66x for COFACE, it factors in the company’s specific earnings trajectory, risk profile, profit margin, market cap, and its place within the industry. Unlike simple peer or industry comparisons, the Fair Ratio adapts to the company's unique situation for a clearer sense of value. With COFACE's actual PE just 0.81x above this fair level, the current price is quite close to our best estimate of intrinsic value.

Result: ABOUT RIGHT

ENXTPA:COFA PE Ratio as at Sep 2025 PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your COFACE 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 perspective, a story about where you think a company is headed, backed up by the financials you expect: future revenue, margins, and fair value.

Instead of just looking at ratios, Narratives let you connect your understanding of COFACE’s business developments, management choices, and industry shifts directly to a set of projected numbers and, ultimately, a fair value. This approach brings your investment thesis to life by turning abstract numbers into a living forecast.

Narratives are easy to create and share on Simply Wall St’s Community page, which is used by millions of investors who shape their own forecasts and compare them with others. By linking your story to a clear fair value, Narratives give actionable signals, such as buying when the fair value is above today’s price or reconsidering if it is not.

What is more, Narratives update dynamically as new data, news, or earnings arrive, so your story and valuation evolve right alongside the business. Take COFACE for example: one Narrative sees a fair value of €21.8 due to strong expansion plans, while another, more cautious view, sets it at €16.5 because of rising insolvencies and cost pressures.

Do you think there's more to the story for COFACE? Create your own Narrative to let the Community know!

ENXTPA:COFA Community Fair Values as at Sep 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 COFA.enxtpa.

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