PG&E (PCG) stock has quietly edged higher over the past month, catching the eye of investors who track utilities with improving fundamentals. The recent move comes as the company reports rising annual revenue and net income growth.

Looking beyond the recent uptick, PG&E’s 22.85% share price return over the past 90 days signals renewed momentum. Even as the one-year total shareholder return remains negative, the company’s improving fundamentals are starting to catch investors’ attention after a challenging start to the year.

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Yet with shares still trading more than 28% below the average analyst price target, the big question remains: is PG&E’s recent run just the beginning of an undervalued story, or has the market already priced in what’s next?

Most Popular Narrative: 21.7% Undervalued

PG&E’s most widely watched fair value estimate comes in noticeably higher than the latest share price, signaling big expectations for its next phase. Here’s what’s powering this bullish perspective right now.

Expanding opportunities for capital investment in grid modernization, wildfire mitigation, and resilience, fueled by both regulatory mandates and the need to serve new electrification and decarbonization requirements, position PG&E to grow its rate base and regulated earnings steadily over the next decade.

What is the secret ingredient behind this gap? The narrative is built on bold long-term earnings, revenue, and profit margin ambitions. Want to see which number crunch unlocks the premium? The real story is hiding in the full breakdown. See what sets apart this valuation.

Result: Fair Value of $20.39 (UNDERVALUED)

However, persistent wildfire liability reform delays or growing affordability pressures in California could quickly reshape PG&E’s long-term earnings trajectory.

Another View: Are Multiples Sending a Different Signal?

Looking beyond fair value estimates, PG&E’s current price-to-earnings ratio of 14.9x is well below both the US Electric Utilities industry average of 21.2x and the peer average of 37.8x. That discount might point to opportunity. Still, is it justified or could it signal caution for value seekers?

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out PG&E 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 undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own PG&E Narrative

If this perspective doesn't quite fit your outlook, or you prefer drawing your own conclusions from the numbers, you can craft a personal take in just a few minutes with Do it your way Do it your way.

A great starting point for your PG&E research is our analysis highlighting 4 key rewards and 2 important warning signs that could impact your investment decision.

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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.