Why Tuya Stock Is Back on Investors’ Radar

Tuya (TUYA) has drawn fresh attention after unveiling an upgraded Hey Tuya platform at its 2026 Global Developer Summit, tying AI assistants more tightly to smart devices and real world use cases.

The update centers on scenario based intelligence, natural language interactions, and deeper links with third party services. This gives investors a new reference point for how Tuya’s AI and IoT ambitions might connect to future product adoption and developer activity.

Despite the recent Hey Tuya announcement and upcoming first quarter 2026 results, Tuya’s share price, now at US$2.35, shows mixed momentum. This includes a 7.31% year to date share price return, a 10.96% 1 year total shareholder return, and a 33.97% 3 year total shareholder return, set against a 5 year total shareholder return decline of 86.91%.

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With Tuya trading at US$2.35, a value score of 2, an analyst price target of US$3.37, and recent revenue and net income growth, the key question is whether this is a mispricing or if markets already see potential future gains reflected in the current price.

Price to Earnings of 24.9x: Is it justified?

Tuya trades on a P/E of 24.9x, which sits below the US software industry average of 30.5x but above the peer group average of 21.3x. This means the market is pricing its earnings at a premium to close peers yet at a discount to the wider sector.

The P/E multiple tells you how much investors are currently paying for each dollar of earnings and is a common reference point for software and cloud platforms with recurring revenue profiles. For Tuya, this level also sits slightly above the estimated fair P/E of 23.5x from the SWS DCF model. That comparison points to a market valuation that is a little richer than that regression based benchmark.

Compared with the broader US software industry, Tuya looks cheaper on earnings, which can suggest the market is assigning a lower value to its profit stream than it does for the average software name. Against closer peers and the fair P/E estimate, however, the stock screens as more expensive. That is the level the market could shift toward if sentiment or growth expectations change over time.

Result: Price to Earnings of 24.9x (ABOUT RIGHT)

However, investors still need to weigh risks around Tuya’s China focused operations and assess whether current revenue and net income growth can support its P/E premium to peers.

Another View: DCF Points to Slight Overvaluation

While the P/E of 24.9x looks roughly in line with the fair ratio of 23.5x, the SWS DCF model tells a slightly different story. With Tuya at US$2.35 versus a DCF value of US$2.30, the shares screen as a touch expensive, which raises the question of how much upside is already priced in.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Tuya for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 53 high quality undervalued stocks. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Next Steps

Curious whether the recent news tilts you more toward optimism or caution on Tuya? Take a closer look at the underlying data, decide quickly where you stand, and then weigh both sides with 4 key rewards and 1 important warning sign

Looking for more investment ideas?

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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.