Thinking about what to do with Macquarie Group stock? You are not alone. Whether you are tempted by its long-term growth track record or pondering if now is the moment to jump in, recent price action offers plenty to talk about. In just the past week, Macquarie Group shares have climbed 5.1%, outpacing their 30-day and year-to-date gains of 3.2% and 3.5%, respectively. Over the past year, returns have been more subdued at 1.6%, but zoom out to a five-year horizon and the stock is up a staggering 106.8%. Clearly, patient investors have been rewarded.

Underlying these numbers have been several key market developments, especially the group’s expanding activity in infrastructure and green energy projects. While these initiatives have helped shape Macquarie’s long-term prospects, they have also influenced sentiment around risk and reward, fueling both cautious optimism and the occasional bout of volatility. Despite the solid run in the share price, it is worth noting that Macquarie’s value score comes in at zero. This means that by conventional valuation checks, the stock is not considered undervalued in any of the six core areas analysts typically assess.

But does this paint the full picture? To really understand if Macquarie Group represents value right now, let us break down the main valuation approaches typically used to assess stocks like this. Later, I will share an even more insightful angle for sizing up its worth.

Macquarie Group scores just 0/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.

Approach 1: Macquarie Group Excess Returns Analysis

The Excess Returns valuation method focuses on how much profit Macquarie Group generates above its cost of equity. In this approach, analysts look beyond simple earnings and examine how effectively the company puts shareholders’ money to work, producing returns greater than what investors could get elsewhere at similar risk.

For Macquarie Group, the key numbers reveal a steady but not extraordinary wealth creation. The company’s book value per share stands at A$96.96, while its expected stable earnings per share are A$12.06, based on future Return on Equity estimates from 11 analysts. After considering a cost of equity of A$9.19 per share, the model calculates an annual “excess return” of A$2.88 per share. The company’s average Return on Equity is projected at 12.07%, with stable book value estimates of A$99.91 from seven analysts. These figures point to solid but not stellar value creation.

According to this valuation, the estimated intrinsic value comes in well below the current share price, suggesting the stock is 55.5% overvalued. In other words, the market is placing a much higher value on Macquarie’s shares than what the company’s future excess returns can justify at today’s prices.

Story Continues

Result: OVERVALUED

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Macquarie Group.MQG Discounted Cash Flow as at Oct 2025

Our Excess Returns analysis suggests Macquarie Group may be overvalued by 55.5%. Find undervalued stocks or create your own screener to find better value opportunities.

Approach 2: Macquarie Group Price vs Earnings

The price-to-earnings (PE) ratio is a widely used metric for valuing profitable companies like Macquarie Group. It provides a quick snapshot of how much investors are currently willing to pay for each dollar of the company's earnings, making it especially relevant for established firms with consistent profitability.

Growth expectations and perceived risks play a big role in determining what a “normal” or “fair” PE ratio should be. Higher anticipated growth and lower risk typically warrant a higher multiple, while slower growth or more volatility will pull that fair value down.

As of now, Macquarie Group is trading at a PE ratio of 23.29x. This is just above the Capital Markets industry average of 22.47x and only slightly higher than the average among immediate peers at 22.91x. On first glance, this suggests the stock is priced in line with its sector and competitors.

However, Simply Wall St’s proprietary “Fair Ratio” sharpens this analysis by adjusting for Macquarie’s earnings growth, industry, profit margin, market cap, and specific business risks. This individualized fair multiple, calculated at 23.27x, sets a precise bar. Rather than relying purely on broad industry benchmarks, it accounts for what truly matters for Macquarie’s valuation.

Because Macquarie’s actual PE (23.29x) is nearly identical to its Fair Ratio (23.27x), the shares are priced about right for their fundamentals and outlook at the moment.

Result: ABOUT RIGHTASX:MQG PE Ratio as at Oct 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 Macquarie Group Narrative

Earlier we mentioned there is an even better way to understand valuation, so let us introduce you to Narratives. A Narrative is your own investment story about a company, a way to express what you believe will drive its future, and to connect these ideas directly to key numbers like future revenue, earnings, and profit margins.

A Narrative brings the company’s story to life by linking your view or thesis to a set of financial forecasts and a personalized fair value, making your investment case clear and actionable. Narratives are simple to use and are available on Simply Wall St’s Community page, where millions of investors share and compare insights.

Narratives empower you to see how your assumptions stack up to the current market price, helping you decide whether Macquarie Group is a buy, hold, or sell for your circumstances. Because they update dynamically when news or results come in, you always see how new developments might affect your thesis and valuation.

For example, two investors might analyze the same information and come to very different conclusions: one believes Macquarie Group’s innovative asset management will justify a price target of A$250.00, while another sees margin pressures as a risk and sets their fair value at A$195.00. With Narratives, both views are modeled and trackable as the facts change.

Do you think there's more to the story for Macquarie Group? Create your own Narrative to let the Community know!ASX:MQG Community Fair Values as at Oct 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 MQG.AX.

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