Last Update 15 Dec 25

KRYS: Future Returns Will Reflect 96% Margins And Expanding International Uptake

Analysts have nudged their price target on Krystal Biotech higher to about $220, reflecting stronger than expected Vyjuvek revenue, early traction from the Germany launch, and exceptionally high gross margins that support the company’s long term profitability outlook.

Analyst Commentary

Bullish analysts point to the latest quarter as evidence that Krystal Biotech is executing ahead of expectations, with Vyjuvek demand and geographic expansion translating into faster top line growth and stronger earnings power than previously modeled.

Bullish Takeaways

Higher Vyjuvek revenue, including early contribution from the Germany launch, supports a view of durable demand and justifies upward revision of long term sales forecasts embedded in the new price target.
The reported 96 percent gross margin indicates a highly efficient cost structure, expanding the company’s long term operating leverage and supporting higher profitability assumptions in valuation models.
A stable gross to net ratio across recent quarters reduces concerns about rising discounts or access pressures, giving analysts confidence that headline revenue is a reliable proxy for underlying demand.
The combination of strong initial ex U.S. traction and premium margins reinforces the thesis that Krystal can scale globally while maintaining a best in class economic profile, which some analysts view as warranting a higher multiple on future cash flows.

Bearish Takeaways

Bearish analysts caution that the reset price target already incorporates continued outperformance on Vyjuvek uptake, leaving less room for error if launch momentum moderates or new markets ramp more slowly than expected.
Reliance on exceptionally high gross margins makes the story sensitive to any future pricing or reimbursement pressure that could compress profitability and challenge current valuation assumptions.
With near term results heavily tied to a single commercial asset, skeptics highlight concentration risk and the need for clear visibility into pipeline progress to support sustained multiple expansion.
Some investors remain wary that macro or policy shifts in key markets, including Europe, could introduce volatility in net pricing and access over time, which could temper the long term growth trajectory currently implied by the higher target.

What's in the News

Chardan raised its Krystal Biotech price target to $220 from $216 and reiterated a Buy rating after Q3 Vyjuvek revenue beat estimates, supported by early Germany launch contribution, a 96 percent gross margin, and a stable gross to net ratio (Periodicals).
The FDA granted platform technology designation to Krystal’s genetically modified, non replicating HSV 1 viral vector used in KB801. This may streamline development, manufacturing, and review for multiple future products that use the same platform, including those building on Vyjuvek data (Key Developments).
KB801, a redosable eye drop gene therapy for neurotrophic keratitis, aims to provide sustained local NGF expression to reduce dosing burden compared with current recombinant NGF drops while maintaining more consistent therapeutic levels in the front of the eye (Key Developments).

Valuation Changes

Fair Value Estimate is effectively unchanged at about $223, signaling that the intrinsic valuation has remained stable despite model refinements.
The Discount Rate has risen slightly from approximately 7.03 percent to about 7.04 percent, reflecting a marginally higher perceived risk or cost of capital in the updated model.
Revenue Growth is effectively unchanged at around 33.30 percent, indicating a consistent outlook for top line expansion over the forecast period.
The Net Profit Margin is essentially flat at roughly 50.19 percent, suggesting no material shift in long term profitability expectations.
The Future P/E has nudged higher from about 17.88x to roughly 17.88x, a negligible change that keeps the valuation multiple broadly in line with prior assumptions.

International launches and broad pipeline expansion are set to diversify revenue streams and enhance market presence beyond a single product.
Manufacturing efficiencies and favorable global healthcare trends are likely to increase profitability and support sustained premium pricing.
Heavy dependence on a single therapy, revenue volatility, rising global costs, and emerging competitive and regulatory challenges threaten long-term growth and profitability.

Catalysts

About Krystal Biotech

A commercial-stage biotechnology company, discovers, develops, manufactures, and commercializes genetic medicines to treat diseases with high unmet medical needs in the United States.What are the underlying business or industry changes driving this perspective?

Significant international expansion is imminent, with VYJUVEK launches in Europe and Japan expected to substantially increase addressable market and top-line revenues over the next 12-18 months; broad regulatory labels and established reimbursement pathways in these markets are likely to support pricing power and faster adoption.
The expansion of Krystal's pipeline, including imminent and near-term clinical readouts in lung disease (AATD, CF), ophthalmology, oncology (NSCLC), and aesthetics, leverages increased R&D productivity, which could drive future revenue growth and diversify earnings beyond a single product.
Favorable dynamics in global healthcare, such as greater willingness to reimburse curative, high-value genetic therapies and broadening awareness due to successful launches and patient outcomes, should support sustainable long-term revenue growth and premium pricing, boosting revenue visibility and potentially net margins.
Operational leverage is steadily improving due to in-house manufacturing at Krystal's Pittsburgh facility and a high gross margin profile (reported at 93%), which, combined with commercial scaling and cost discipline, is poised to further enhance net margins and support improving profitability.
Continued advancements and acceptance in genomic and gene therapy technologies, together with supportive regulatory trends and growing patient/clinician confidence in gene therapies, are expected to lower commercial friction, accelerate patient onboarding, and reduce time-to-market for future products-bolstering both short
and long-term earnings potential.

Krystal Biotech Earnings and Revenue Growth

Krystal Biotech Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming Krystal Biotech's revenue will grow by 33.2% annually over the next 3 years.
Analysts assume that profit margins will increase from 40.8% today to 57.2% in 3 years time.
Analysts expect earnings to reach $485.8 million (and earnings per share of $14.87) by about September 2028, up from $146.7 million today. However, there is a considerable amount of disagreement amongst the analysts with the most bullish expecting $698.8 million in earnings, and the most bearish expecting $313.6 million.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 14.9x on those 2028 earnings, down from 27.9x today. This future PE is lower than the current PE for the US Biotechs industry at 15.3x.
Analysts expect the number of shares outstanding to grow by 0.63% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 6.78%, as per the Simply Wall St company report.

Krystal Biotech Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

The unpredictability and variability in patient treatment patterns (pauses, restarts, and compliance rates) for VYJUVEK create persistent quarter-to-quarter revenue volatility, increasing the risk of earnings fluctuations and limiting visibility around future top-line growth and profitability.
Krystal Biotech's heavy current reliance on VYJUVEK for rare disease revenue brings concentration risk, as the company's other pipeline programs remain in earlier-stage clinical development, meaning any setbacks, slow rollouts, or competition could rapidly erode revenue and earnings momentum.
Despite successful launches, access to European and Japanese markets hinges on achieving timely and favorable reimbursement decisions-delays, pricing pressure, or discontinuity in programs like France's "Accès Précoce" could slow international revenue growth, compress net margins, and prolong operating expense drag.
High and rising SG&A costs associated with global commercialization, sales force expansion, and increased headcount, plus escalating R&D spend (especially for oncology and combination trials), threaten long-term profitability if top-line expansion is not sustained or if new launches face regulatory or competitive barriers.
Evolving gene therapy technologies and rapid advances in alternative delivery methods (e.g., CRISPR, RNA-based platforms) could diminish the competitive strength of Krystal's HSV-1 vector platform, while persistent regulatory scrutiny regarding long-term safety may result in additional post-marketing requirements, both of which could drive up costs, slow adoption, and negatively impact future revenue and earnings trajectories.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of $205.2 for Krystal Biotech based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $252.0, and the most bearish reporting a price target of just $166.0.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $849.4 million, earnings will come to $485.8 million, and it would be trading on a PE ratio of 14.9x, assuming you use a discount rate of 6.8%.
Given the current share price of $141.21, the analyst price target of $205.2 is 31.2% higher.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

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Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

KRYS: Global Expansion And Pipeline Shifts Will Shape Near-Term Performance