Icahn Enterprises (IEP) is back in focus after its second quarter 2026 earnings update, which combined a wider net loss, an affirmed cash distribution and plans to sell Pep Boys for US$700 million.

At a share price of US$7.63, Icahn Enterprises has seen a 1-month share price return of 4.38% and a year to date share price return of 2.01%. The 5-year total shareholder return is down 65.70%, suggesting recent momentum is modest compared with a weak longer term record.

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The share price recovery in Icahn Enterprises has been modest compared with the longer term decline, even as liquidity is set to improve once the Pep Boys sale closes. Is most of the rebound already reflected, or is there still clear upside in today’s valuation?

Preferred Price-to-Sales of 0.5x: Is it justified?

Icahn Enterprises is currently valued at a P/S of 0.5x, which screens as inexpensive compared with both peers and the wider Industrials group at the last close of $7.63.

The P/S ratio compares a company’s market value with its revenue. For a group like Icahn Enterprises that is currently unprofitable, this can be a useful way to gauge how much investors are paying for each dollar of sales when earnings based measures are less meaningful.

According to the SWS checks, Icahn Enterprises trades on a P/S of 0.5x, while the peer average sits at 1.8x. The company also stands below the global Industrials average P/S of 0.8x. That is a wide gap, and it suggests the market is placing a lower value on Icahn Enterprises’ revenue base than on comparable companies, despite the stock also trading about 9.1% below the SWS DCF fair value estimate of $8.39.

Result: Price-to-sales of 0.5x (UNDERVALUED)

However, Icahn Enterprises still carries clear risks if the net income loss of US$515 million persists or if the planned US$700 million Pep Boys sale experiences delays or setbacks.

Another View on Icahn Enterprises Using the SWS DCF Model

The low P/S ratio presents Icahn Enterprises as inexpensive, and the SWS DCF model offers another perspective. On this approach, the stock trades around 9.1% below an estimated fair value of $8.39, which also suggests undervaluation. The key question is whether that discount adequately reflects the ongoing losses and funding risks.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Icahn Enterprises 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 51 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

With Icahn Enterprises showing both clear pressure points and some potential positives, it makes sense to review the data yourself and act while the information is fresh. A useful next step is to weigh both sides of the story through the 1 key reward and 3 important warning signs

Looking for more investment ideas beyond Icahn Enterprises?

If you are reassessing Icahn Enterprises, do not stop there. Broaden your watchlist now so you are not relying on a single story or sector.

Use the Simply Wall St screener to spot stocks that fit your style before the next move catches you off guard.

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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.