Evaluating AnaptysBio (ANAB) Valuation After A Strong 90 Day Share Price Gain

AnaptysBio (ANAB) has drawn investor attention after recent trading left the shares with a 1 day return of 1.6%, a month return near flat, and a past 3 months gain approaching 38%.

See our latest analysis for AnaptysBio.

With the share price at US$43.91, AnaptysBio’s 90 day share price return of 38% contrasts with a small year to date decline, while a very large 1 year total shareholder return suggests momentum has been building over a longer horizon.

If AnaptysBio’s recent move has caught your eye, this could be a good moment to scan other healthcare names using our screener for healthcare stocks.

So with the shares at about US$43.91, a value score of 3, a very large 1 year return, and the stock trading below an average analyst price target, is there still a buying opportunity here, or is the market already pricing in future growth?

Price-to-Sales of 7.2x: Is It Justified?

On a P/S of 7.2x at a share price of US$43.91, AnaptysBio screens as inexpensive versus the broader US Biotechs group, yet expensive against its closer peers and a fair value yardstick.

P/S compares the company’s market value to its revenue, which is often used for biotech names like AnaptysBio that are still loss making and do not have meaningful earnings yet.

Here, the picture is mixed. The stock is described as trading at 79.2% below an internal fair value estimate of US$211.14 according to the SWS DCF model, which points to a large discount on cash flow based assumptions. At the same time, the current 7.2x P/S is above a peer average of 4.9x and above an estimated fair P/S ratio of 2.7x. This is a level the market could move toward if those relationships reassert.

Against the wider US Biotechs industry, though, AnaptysBio’s 7.2x P/S sits well under the 11.5x industry average, which signals investors are assigning a lower revenue multiple than the sector as a whole even with forecasts calling for revenue growth.

Explore the SWS fair ratio for AnaptysBio

Result: Preferred multiple of 7.2x P/S (ABOUT RIGHT given mixed signals from peers, industry and fair ratio)

However, you are still tying your thesis to a clinical stage pipeline and a company that currently reports a US$84.63 million net loss and relies on partner collaborations to progress programs.

Find out about the key risks to this AnaptysBio narrative.

Another Take: DCF Paints a Very Different Picture

While the 7.2x P/S suggests the shares sit between peers and the broader biotech group, our DCF model points in a very different direction. On that view, AnaptysBio at US$43.91 is trading at a very large discount to an estimated fair value of US$211.14.

That gap implies the market is either heavily discounting the clinical and funding risks, or our cash flow assumptions are far more optimistic than current sentiment. If both views are on the table, which one do you treat as the anchor for your own thesis?

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 AnaptysBio 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 877 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 AnaptysBio Narrative

If you look at the numbers and come to a different conclusion, or simply prefer to test your own view, you can build a custom thesis in just a few minutes with Do it your way.

A great starting point for your AnaptysBio research is our analysis highlighting 2 key rewards and 3 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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