Viking Therapeutics (VKTX): Revisiting Valuation After a Renewed Share Price Rally

Viking Therapeutics (VKTX) has been on traders radar after its recent share price climb, and the move is forcing investors to revisit what is actually priced into this clinical stage pipeline.

See our latest analysis for Viking Therapeutics.

The latest leg higher has pushed Viking Therapeutics to a share price of $37.35, capping a powerful 90 day share price return of nearly 49 percent even though the year to date share price return is still negative and the one year total shareholder return remains slightly in the red. This suggests traders are leaning into the pipeline story again and are more willing to accept clinical and valuation risk than they were a few months ago.

If this kind of renewed risk appetite has you looking beyond Viking, it could be worth scanning other innovative biotech names through our curated healthcare stocks to spot similar setups earlier.

With the stock still down over the year even as its pipeline gathers momentum and analyst targets imply sizable upside, investors now face a key question: Is Viking Therapeutics a mispriced growth story, or is future success already reflected?

Price to Book of 5.9x: Is it justified?

On a price to book basis, Viking Therapeutics trades at 5.9 times its book value, and this leaves it looking both richer and cheaper depending on which comparison you use.

The price to book ratio compares what investors are willing to pay for each dollar of net assets to the actual accounting value on the balance sheet. It is a common yardstick for early stage and unprofitable biotechs that have no revenues or earnings to anchor valuation.

Against a hand picked peer set, Viking screens as good value. Its 5.9 times price to book sits below the peer group average of 7.7 times, suggesting investors are paying a relative discount for its asset base, even as the pipeline story gains traction.

Stacked up against the broader US biotech universe, however, the picture flips. The typical company in the space trades at roughly 2.7 times book, and this makes Viking look materially more expensive than the sector norm, implying the market is assigning a richer set of expectations to its clinical assets than it does to the average biotech name.

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

Result: Price to Book of 5.9x (ABOUT RIGHT)

However, clinical setbacks or weaker than expected data for lead assets like VK2809 or VK2735 could quickly cool sentiment and compress valuation.

Find out about the key risks to this Viking Therapeutics narrative.

Build Your Own Viking Therapeutics Narrative

If you are not aligned with this perspective or simply prefer your own analysis, you can build a personalized view in just minutes, Do it your way

A great starting point for your Viking Therapeutics research is our analysis highlighting 4 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.

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