A Look At Pharvaris (PHVS) Valuation As Long Term Returns Contrast With Current Price To Book Metrics

Event context and recent share performance

Pharvaris (PHVS) has been drawing attention after recent share price moves, with the stock closing at US$25.63 and showing mixed short term returns, including a 1 day decline and gains over the past week.

See our latest analysis for Pharvaris.

Those short term moves sit against a mixed backdrop, with a 30 day share price return of 7.24% and a year to date share price return of a 3.21% decline. At the same time, the 1 year total shareholder return of 53.93% and 3 year total shareholder return of 168.94% point to momentum that has been building over a longer period, as investors reassess growth prospects and risk around Pharvaris clinical progress and rare disease focus.

If Pharvaris has caught your eye, it can be useful to see what else is happening across healthcare, including healthcare stocks that might fit a similar thesis or offer a contrast.

With Pharvaris trading at US$25.63 against an analyst price target of about US$45.93 and what is described as a very large estimated intrinsic discount, you have to ask: is this a genuine opportunity, or is future growth already priced in?

Price to Book of 4.6x: Is it justified?

At Pharvaris' last close of US$25.63, the stock is described as good value on a P/B of 4.6x compared with peers at 13x, yet it still screens as expensive against the broader US pharmaceuticals group.

The P/B ratio compares the company’s market value to its book value, which is especially watched for pre revenue biopharma names that are still loss making and valued more on their assets, pipeline and cash than on current earnings.

Here, Pharvaris trades on a 4.6x P/B that looks low relative to its direct peer set average of 13x. This indicates investors are paying less for each dollar of net assets than they are for comparable companies, even though the company is unprofitable and reports no meaningful revenue.

Against the wider US pharmaceuticals industry, however, a 4.6x P/B is described as expensive versus an industry average of 2.6x. This points to a premium price tag at the sector level and suggests the market is already assigning a higher value than many listed drug developers.

See what the numbers say about this price — find out in our valuation breakdown.

Result: Price-to-book of 4.6x (ABOUT RIGHT)

However, you still have to factor in clear risks, including Pharvaris reporting a net loss of €163.72m and its reliance on successful late stage trial outcomes.

Find out about the key risks to this Pharvaris narrative.

Another view on value: the SWS DCF gap

While the 4.6x P/B ratio suggests Pharvaris looks relatively restrained versus its peer average of 13x, our DCF model points in a very different direction. It indicates the shares trade at a very large discount to an estimated fair value of about US$299.35 per share. This raises the question of whether the model is too optimistic or the market too cautious.

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Pharvaris 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 886 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 Pharvaris Narrative

If you look at these figures and reach a different view, or simply prefer to rely on your own work, you can build a personalised thesis in just a few minutes with Do it your way.

A great starting point for your Pharvaris research is our analysis highlighting 1 key reward and 3 important warning signs that could impact your investment decision.

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.

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