Valuation Check: Energy, Retail, Tech and Staples

December 21, 2025 at 07:09 UTC

6 min read

Bar chart visualizing energy and tech sector valuation discounts on cash flow and multiples

Key Points

Several large caps show DCF-based undervaluation despite mixed share price momentum.
Energy names like Phillips 66 and ConocoPhillips screen cheap on cash flows but rich on earnings multiples.
Growth and tech stocks such as Zoom and Criteo appear deeply discounted on multiple valuation lenses.
Lowe’s and Unilever trade near fair value, with modest discounts tied to execution and macro risks.

Energy stocks: cash flow upside vs rich earnings multiples

Recent analysis highlights a split picture for major energy names. Phillips 66, after a 128.0% gain over five years and 21.2% over the last year, has seen its share price cool, falling 8.9% in the past week and 3.6% over the month, though it remains up 12.7% year to date. A Discounted Cash Flow (DCF) model using a two-stage Free Cash Flow to Equity approach, with free cash flow projected from about $1.48 billion today to roughly $9.16 billion by 2035, yields an intrinsic value near $444.72 per share, implying the stock is about 71.0% undervalued. However, on a price-to-earnings basis Phillips 66 trades at around 34.7x, well above the Oil and Gas industry average of roughly 12.8x and a company-specific Fair Ratio of 24.6x, leading Simply Wall St to flag it as overvalued on earnings. ConocoPhillips shows a similar tension. Its shares have drifted lower year to date but turned positive over the last 30 days, with the most popular narrative assigning a fair value of $112.39 versus a last close of $91.94, or about 18.2% undervalued. That view leans on an expanding LNG portfolio and large liquefaction projects in Qatar, Port Arthur and Willow, which are expected to support free cash flow and revenue growth through 2029. A separate DCF model suggests an even steeper discount to long-term cash flow potential, indicating the market may be cautious about future energy prices and project execution.

Retail and consumer staples: modest discounts and execution focus

In retail and staples, valuations cluster closer to perceived fair value. Lowe’s Companies has seen its share price drift lower over the past week but remain positive over the past month, with a recent close around $240.44 leaving the stock roughly flat over the past year at about -1.0%, yet up 26.4% over three years and 62.0% over five years. A DCF-based intrinsic value of $262.03 per share implies an 8.2% discount, while a valuation score of 4/6 suggests it screens undervalued on several checks. On earnings, Lowe’s trades at about 19.95x, slightly below the Specialty Retail industry average of 20.26x and under a Fair Ratio of 21.47x, again pointing to modest undervaluation. A widely followed narrative pegs fair value even higher at $272.97, or about 11.9% above the current price, hinging on successful execution in its Pro customer expansion and digital initiatives, including the acquisition of Foundation Building Materials to deepen access to the contractor market. Unilever, by contrast, appears broadly fairly priced. A DCF model using free cash flow rising from about €6.6 billion to roughly €9.1 billion by 2035 estimates intrinsic value at €52.55 per share, about a 7.0% discount to the market price and consistent with a 3/6 valuation check score. Its shares trade on roughly 22.26x earnings, close to both the Personal Products industry average of 22.71x and a Fair Ratio of 22.47x, leading Simply Wall St to describe the valuation as “about right” despite recent share pullback and an ice cream spin-off delay.

Tech and media: deep discounts after sharp drawdowns

Technology and media names in the coverage show some of the largest modeled discounts. Zoom Communications, after a 76.1% share price decline over five years, has begun to recover, gaining 0.3% over the last week, 14.2% over the past month, 10.1% year to date and 4.9% over the last year. A DCF analysis based on current free cash flow of about $1.94 billion, projected to rise modestly to roughly $2.53 billion by 2035, yields an intrinsic value of $122.83 per share, about 26.9% above the current market price. Zoom scores 5 out of 6 on undervaluation checks and trades on a PE of about 16.7x, well below the Software industry average of 32.4x and a Fair Ratio of 24.3x, indicating undervaluation on both cash flow and earnings metrics. Criteo presents an even starker gap. Its share price, around $19.50, is down 50.4% year to date and 55.1% over the past year, with declines of 4.4% over the last week and 1.9% over the month. A two-stage DCF model, using trailing free cash flow of about $217.9 million and projections rising to roughly $377.5 million by 2035, produces an estimated intrinsic value near $127 per share, implying about 84.6% undervaluation. On earnings, Criteo trades at about 6.10x, far below the Media industry average of 16.04x and a Fair Ratio of 12.54x, again screening as undervalued. These assessments come as Criteo pivots toward a broader commerce media platform and Zoom invests in AI-driven collaboration tools and an expanded enterprise suite.

Other valuation contrasts: Kodiak Gas Services and Spotify

Other names show how different valuation methods can diverge. Kodiak Gas Services, which provides compression infrastructure for US natural gas production, has seen its stock fall 2.6% over the past week and 13.1% year to date, but rise 8.4% over the last month. A DCF model using last twelve month free cash flow of about $166.5 million and projections to roughly $509 million by 2029 estimates intrinsic value at about $137.42 per share versus a current price near $36.31, implying 73.6% undervaluation. Yet Kodiak trades on a PE of about 41.6x, well above the Energy Services industry average of 18.0x, a peer average of 31.0x and a Fair Ratio of 22.3x, leading Simply Wall St to label it overvalued on an earnings basis and to assign a valuation score of 2/6. Spotify Technology, after a 649.2% three-year share price surge, remains volatile but continues to post strong gains, up 27.2% year to date and 26.3% over the last year despite a 2.6% pullback in the past week and a flat 30-day performance. A DCF model, based on trailing free cash flow of about €2.9 billion and projections to roughly €6.4 billion by 2029 and over €10 billion by 2035, suggests a fair value of $782.76 per share, about a 25.6% discount to the current price and supporting a 4/6 valuation score. However, Spotify’s PE of about 72.93x sits well above the broader Entertainment industry average of 20.50x and a Fair Ratio of 34.83x, indicating overvaluation on an earnings multiple basis even as cash flow modeling points to undervaluation.

Key Takeaways

Across sectors, DCF models often indicate larger upside than earnings-based multiples, underscoring how sensitive valuations are to long-term cash flow assumptions.
Energy companies like Phillips 66 and ConocoPhillips combine strong multi-year returns with recent pullbacks, leaving them screened as undervalued on cash flows but expensive on PE ratios.
Retail and staples names such as Lowe’s and Unilever cluster near fair value, with only modest discounts that depend heavily on execution in strategic initiatives and broader macro trends.
Tech and media stocks including Zoom and Criteo show some of the deepest modeled discounts, reflecting sharp share price resets alongside still-solid free cash flow and low earnings multiples.
Cases like Kodiak Gas Services and Spotify illustrate that a single stock can appear undervalued on DCF yet overvalued on PE, highlighting the importance of comparing multiple valuation lenses.