Does Telix Offer Opportunity After Regulatory Update and Recent 7% Jump in 2025?

Thinking about what to do with Telix Pharmaceuticals stock? You are not alone. There is a lot to consider here, whether you already hold ASX:TLX or are simply weighing a new position. Over the past year, the stock has given investors some volatility, dropping around 8.5%. However, when you look at a three-year period, the performance shows a notable improvement, with returns rising above 180%. This combination of recent swings and longer-term growth leaves investors debating whether the stock represents a genuine bargain or a potential risk.

Recent gains this week, including a 7% increase in just one day, have improved sentiment and suggest that the market could be showing renewed interest in Telix's potential. This uptick may be related to regulatory developments for the company’s pipeline or favorable earnings updates, though the overall trend remains inconsistent given the 28% decline over the last three months. With both revenue and net income growing at solid annual rates, some investors are watching for an eventual turnaround, provided the market can settle on an appropriate valuation.

So, is Telix undervalued? According to our valuation scorecard, the company scores 2 out of 6, indicating it appears undervalued by two primary measures out of the six assessed. While this is not an overwhelming signal, the significant discount to analyst price targets and the notable 66.5% DCF discount may justify a closer examination. Next, we will break down how Telix’s current value compares across widely used valuation methods. Stay tuned, as we will also highlight a key factor that many investors overlook when assessing a company's true value.

Telix Pharmaceuticals delivered -8.5% returns over the last year. See how this stacks up to the rest of the Biotechs industry.

Approach 1: Telix Pharmaceuticals Cash Flows

The Discounted Cash Flow (DCF) model estimates a company’s true worth by projecting its future free cash flows and then discounting those amounts back to today’s value. This approach helps investors look past day-to-day price swings and consider the long-term earning power of the business.

For Telix Pharmaceuticals, the most recent twelve-month free cash flow stands at approximately A$3.41 million. Looking forward, analyst projections expect this figure to rise dramatically, reaching A$878.18 million by 2035. This sharp increase reflects significant anticipated growth in the company’s future business activities.

Based on these forecasts and by applying the 2 Stage Free Cash Flow to Equity valuation model, the estimated intrinsic value per share is A$53.99. With the stock currently trading at a 66.5% discount to its DCF fair value, Telix appears to be 66.5% undervalued according to this measure.

This considerable margin suggests that the current market price is leaving plenty of upside on the table, presuming the cash flow projections materialize in the coming years. In simple terms, for value-focused investors, Telix presents a potentially attractive bargain based on future cash flow potential.

Result: UNDERVALUED

Our DCF analysis suggests Telix Pharmaceuticals is undervalued by 66.5%. Track this in your watchlist or portfolio, or discover more undervalued stocks based on DCF analysis.

Approach 2: Telix Pharmaceuticals Price vs Earnings

The Price-to-Earnings (PE) ratio is often the preferred metric for valuing profitable companies. It gives investors a useful gauge of how much the market is willing to pay for each dollar of current earnings. When companies are generating steady profits, the PE ratio translates performance into an easy-to-understand multiple for comparison across the industry.

Growth expectations and risks play a big role in defining what constitutes a "normal" or "fair" PE ratio. Fast-growing companies, or those with a proven track record of innovation and revenue expansion, often command higher multiples. Firms facing greater uncertainty or slowing growth tend to trade at lower ratios.

Currently, Telix Pharmaceuticals trades at a substantial PE ratio of 122.7x. In comparison, the average PE across the Biotechs industry stands at 27.8x, while the typical peer trades at just 25.1x. Simply Wall St’s proprietary Fair Ratio, which takes into account Telix’s earnings growth, margins, and market risk, is calculated at 35.5x. This means Telix’s current PE is well above both industry norms and what would be expected for a company with its characteristics.

Comparing the Fair Ratio with the actual PE multiple suggests the stock is trading far above what fundamentals and sector trends would typically justify at this stage.

Result: OVERVALUED

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Telix Pharmaceuticals Narrative

Rather than relying solely on numbers, a Narrative weaves a company’s story together with financial forecasts, helping you visualize how assumptions about growth, margins, and earnings shape an estimated fair value. Narratives make it easy to connect market developments or company milestones with their impact on value, transforming complex financial data into a clear investment story you can relate to.

On Simply Wall St, Narratives turn traditional analysis into a more accessible process, used by a community of millions to articulate personal perspectives on when to buy, hold, or sell. When new information arrives, such as earnings announcements or major news, Narratives automatically update to keep your outlook aligned with the latest events.

This approach empowers you to confidently compare the stock’s Fair Value, as determined by your own or others’ Narratives, to the current market Price. For example, one investor’s Narrative may expect aggressive revenue growth and assign Telix a fair value far above the present price, while another might forecast slower progress and arrive at a much more cautious valuation. This shows how different perspectives shape investment decisions.

Do you think there's more to the story for Telix Pharmaceuticals? Create your own Narrative to let the Community know!

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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