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Wondering if Constellation Energy is still worth buying after its huge run, or if most of the upside is already priced in? This article is going to unpack exactly that.
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The stock has cooled slightly in the last month, down 0.6%, but it is still up 1.0% over the past week, 46.5% year to date, and 57.4% over the last year, with roughly 313.7% gains over three years signaling a powerful long term trend.
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Those moves have come as investors refocus on nuclear and low carbon power as critical to the energy transition, putting companies like Constellation front and center in the decarbonization story. Policy support for clean energy, shifting utility sector sentiment, and a broader hunt for defensible growth have all helped push the stock higher.
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Despite that surge, Constellation only scores a 2/6 valuation score, which means most of our standard checks suggest it is not obviously cheap. Next, we will walk through the main valuation approaches investors are using today, and then finish with a more nuanced way to think about what the stock is really worth.
Constellation Energy scores just 2/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.
A Discounted Cash Flow model estimates what a business is worth by projecting its future cash flows and discounting them back to today in dollar terms.
For Constellation Energy, the latest twelve month Free Cash Flow is about $657 million in the red, reflecting heavy investment and short term volatility. Analysts then project a sharp improvement, with Free Cash Flow expected to reach around $3.6 billion in 2026 and grow steadily toward roughly $7.9 billion by 2035. Analyst estimates cover the next few years, and beyond that Simply Wall St extrapolates the trend using a two stage Free Cash Flow to Equity approach.
Aggregating and discounting these projected cash flows gives an estimated intrinsic value of about $491.46 per share. Compared with the current share price, this implies the stock is roughly 27.7% undervalued, which indicates the market may not be fully pricing in Constellation’s long term cash generation potential.
Result: UNDERVALUED
Our Discounted Cash Flow (DCF) analysis suggests Constellation Energy is undervalued by 27.7%. Track this in your watchlist or portfolio, or discover 914 more undervalued stocks based on cash flows.
CEG Discounted Cash Flow as at Dec 2025
Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Constellation Energy.
For profitable companies like Constellation Energy, the Price to Earnings (PE) ratio is a useful way to gauge value because it directly links what you pay for each share to the earnings the business is generating today. Investors typically accept a higher PE when they expect faster earnings growth or see the business as lower risk, while slower growth or higher uncertainty usually justifies a lower, more conservative PE.
Constellation currently trades on about 40.5x earnings, roughly double the Electric Utilities industry average of about 19.4x and also well above the peer average of around 20.4x. At face value, that makes the stock look expensive compared to its sector and similar companies. However, Simply Wall St’s Fair Ratio framework goes a step further by estimating what PE multiple a company should trade on after accounting for its specific earnings growth outlook, profitability, risk profile, industry context, and market cap.
On this basis, Constellation’s Fair Ratio is around 39.6x, only slightly below the current 40.5x PE. That indicates the stock is trading close to where it might be considered fairly valued once its growth and risk are taken into account.
Result: ABOUT RIGHT
NasdaqGS:CEG PE Ratio as at Dec 2025
PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1465 companies where insiders are betting big on explosive growth.
Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives, a simple framework on Simply Wall St’s Community page that lets you write the story behind your numbers by linking your view of Constellation Energy’s business (for example, how fast data center power demand grows, how durable nuclear margins are, and what risks regulators pose) to a concrete forecast for future revenue, earnings, and margins. This then rolls up into a Fair Value you can compare with today’s share price to see whether it looks like a buy or a sell. Because Narratives are updated dynamically as new news or earnings arrive, different investors can hold very different but well structured views. For example, one optimistic Narrative might assume strong nuclear cash flows, robust data center contracts, and a Fair Value near $400 per share. Another more cautious Narrative might focus on regulatory and concentration risks and land closer to $184, helping you quickly see where you sit on that spectrum and why.
Do you think there’s more to the story for Constellation Energy? Head over to our Community to see what others are saying!
NasdaqGS:CEG 1-Year Stock Price Chart
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 CEG.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com
