Is Xeris Biopharma Holdings (XERS) Price Rally Still Justified After Recent Company Updates
- If you are looking at Xeris Biopharma Holdings and wondering whether the recent excitement still offers fair value, this article will walk you through what the current price might be implying.
- The stock last closed at US$7.93, with returns of 7.9% over the past week, 14.3% over the past month, 7.9% year to date, and 133.2% over the last year, along with a very large 3 year return that is more than 5x.
- Recent company news has put a spotlight on Xeris Biopharma Holdings, adding context to these sharp moves in the share price. Product updates, financing decisions, partnerships or regulatory milestones can all play a part in reshaping how investors think about risk and potential rewards for a stock like this.
- On our valuation checklist, Xeris Biopharma Holdings scores 3 out of 6 for being undervalued, giving it a valuation score of 3. Next, we will look at how different methods approach that number before finishing with a way of assessing value that many investors find even more useful.
Approach 1: Xeris Biopharma Holdings Discounted Cash Flow (DCF) Analysis
A Discounted Cash Flow, or DCF, model estimates what a company might be worth today by projecting its future cash flows and then discounting those back into present dollars using a required rate of return.
For Xeris Biopharma Holdings, the model used is a 2 Stage Free Cash Flow to Equity approach, based on cash flow projections in $. The latest twelve month Free Cash Flow is about $9.0 million. Analyst inputs and subsequent extrapolations in the model have Free Cash Flow reaching $222.0 million in 2030, with a series of annual projections between 2026 and 2035 that are discounted back to today to reflect risk and the time value of money.
When all those projected and discounted cash flows are added up and divided by the number of shares, Simply Wall St’s DCF model arrives at an estimated intrinsic value of about $41.67 per share. Compared with the recent share price of US$7.93, this output suggests the stock is around 81.0% undervalued on this measure.
Result: UNDERVALUED (based on this DCF model)
Our Discounted Cash Flow (DCF) analysis suggests Xeris Biopharma Holdings is undervalued by 81.0%. Track this in your watchlist or portfolio, or discover 879 more undervalued stocks based on cash flows.
Approach 2: Xeris Biopharma Holdings Price vs Sales
For many biopharmaceutical companies that are still working toward consistent profitability, the P/S ratio is often more useful than P/E or P/B, because it focuses on what investors are paying for each dollar of revenue rather than current earnings or book value.
In general, higher growth expectations and lower perceived risk can support a higher “normal” P/S ratio. Slower expected growth or higher risk usually go with a lower multiple. For Xeris Biopharma Holdings, the current P/S ratio is about 4.94x. That sits above the Pharmaceuticals industry average of about 4.30x, and above the peer group average of roughly 3.13x, which on a simple comparison suggests the shares trade at a higher revenue multiple than many alternatives.
Simply Wall St’s Fair Ratio is its estimate of what a balanced P/S multiple might look like for this company, after considering factors such as growth, profit margins, risks, industry and market cap. For Xeris Biopharma Holdings, the Fair Ratio is 5.98x, which is higher than the current 4.94x. On this framework, the stock screens as undervalued relative to what that tailored multiple would imply.
Result: UNDERVALUED
P/S ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1444 companies where insiders are betting big on explosive growth.
Upgrade Your Decision Making: Choose your Xeris Biopharma Holdings Narrative
Earlier we mentioned that there is an even better way to understand valuation. Let us introduce you to Narratives, which are simply your story about Xeris Biopharma Holdings, linked directly to a forecast for revenue, earnings and margins, and then to a Fair Value that you can compare with the current price to help decide whether to buy or sell. All of this is available inside Simply Wall St’s Community page, where Narratives are updated automatically when new news or earnings arrive. One investor might build a Narrative that matches the higher Fair Value of about US$11.50 per share, while another might align more with the lower analyst price target of US$6.00. This shows how different perspectives on the same company can lead to very different conclusions.
Do you think there's more to the story for Xeris Biopharma Holdings? Head over to our Community to see what others are saying!
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.
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