Is Pop Mart’s Share Price Still Justified After Its 500% Rally?

Thinking about what to do with your Pop Mart International Group shares, or eyeing the stock from the sidelines? You are not alone. After all, this is a company that has turned heads, and maybe even sparked a little bit of FOMO, with returns many investors only dream about. Over the past year alone, Pop Mart’s stock has rocketed up 511.2%, and the year-to-date gain stands at a remarkable 216.2%. Zooming out, those numbers become even more eye-popping, with a three-year return of 1456.5%.

However, it has not been a completely smooth ride, especially lately. In the past week, the stock dipped by 6.7%, even as the broader collectibles market saw heightened interest. This short-term pullback comes after a fairly strong month, with a 3.7% gain in the last 30 days, suggesting some volatility as investors consider both the long-term growth story and changing risk perceptions tied to consumer trends and brand momentum.

Is Pop Mart a clear opportunity or a stock that’s gotten ahead of itself? Initial valuation checks are mixed. The company is currently undervalued in just 1 out of 6 major evaluation metrics, giving it a value score of 1. That means there are some reasonable doubts about how much upside remains at current prices, but also room for a deeper examination of what those numbers really mean.

Let’s unpack each of the traditional valuation methods used to assess Pop Mart. Stay tuned until the end, because there is a smarter way to cut through all the noise when it comes to figuring out if a stock like this is truly undervalued.

Pop Mart International Group scores just 1/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.

Approach 1: Pop Mart International Group Discounted Cash Flow (DCF) Analysis

The Discounted Cash Flow (DCF) model works by forecasting a company’s future cash flows and then discounting them back to their current value. Essentially, it is a way of estimating what a business is really worth today based on its ability to generate cash down the road.

For Pop Mart International Group, the latest twelve months’ Free Cash Flow came in at approximately CN¥4.49 Billion. Analyst estimates predict strong growth for the company, with projected Free Cash Flow reaching CN¥17.18 Billion in 2027, and extrapolated figures pushing up to CN¥26.62 Billion by 2035. While the first five years are based on analyst estimates, later years use moderate growth assumptions for these projections.

Based on this two-stage Free Cash Flow to Equity analysis, the intrinsic value of Pop Mart shares is estimated at CN¥290.01. This calculation currently implies the stock is trading about 0.6% below its DCF-derived value, suggesting very little mispricing according to this metric.

Story Continues Result: ABOUT RIGHT

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

9992 Discounted Cash Flow as at Sep 2025 Simply Wall St performs a valuation analysis on every stock in the world every day (check out Pop Mart International Group's valuation analysis). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes.

Approach 2: Pop Mart International Group Price vs Earnings

For profitable companies like Pop Mart International Group, the Price-to-Earnings (PE) ratio is a widely used metric because it connects a company’s stock price to its earnings power. Investors favor the PE ratio as it provides a quick snapshot of how much the market is willing to pay for each unit of earnings and is easy to compare across companies and industries.

However, not all PE ratios are created equal. Higher growth prospects, higher margins, or lower perceived risk naturally support a higher PE ratio, while slower growth or higher risk command a discount. Context matters, and the “right” PE depends not just on the company itself but also on its outlook compared to peers and the market at large.

Pop Mart currently trades at a PE of 51.6x. This is well above both the specialty retail industry average of 14.0x and the peer group average of 19.7x. On the surface, this suggests that the stock is richly valued. However, Simply Wall St's “Fair Ratio” takes things several steps further by factoring in company-specific drivers like future earnings growth, profit margins, risk profile, industry conditions, and market cap. It generates a more realistic benchmark for what the valuation should be. For Pop Mart, the Fair Ratio has been calculated at 33.5x. This makes comparing just to the industry or peers seem overly simplistic.

Given that Pop Mart’s actual PE of 51.6x is well above its Fair Ratio, the stock appears to be overvalued on this basis. The current price reflects growth and quality, but also leaves little margin for error in execution or future performance.

Result: OVERVALUED

SEHK:9992 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 Pop Mart International Group Narrative

Earlier we mentioned that there's an even better way to understand valuation, so let's introduce you to Narratives. A Narrative is your personal story about what you believe is really happening at a company. It combines your view of Pop Mart’s future with numbers like fair value, revenue, earnings, and profit margins. Narratives link the company’s story to a financial forecast and, crucially, to a fair value that puts everything into perspective.

On Simply Wall St’s Community page, millions of investors use Narratives to easily build, share, and compare these stories. Narratives make it straightforward to see if Pop Mart’s current price lines up with your fair value estimate, which helps you decide whether to buy, hold, or sell. They also update dynamically when new information, like earnings or major news, comes in, ensuring your outlook always stays relevant.

For example, some investors may think Pop Mart’s best years are ahead and estimate a high fair value. Others see challenges ahead and take a more conservative view. Narratives empower you to not just follow the numbers, but to invest with confidence in the story you believe.

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

SEHK:9992 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 9992.HK.

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