Assessing argenx After Its 190% Five Year Surge and Recent Share Price Pullback

• If you are wondering whether argenx is still worth buying after its big run over the past few years, you are not alone. This is exactly the question we are going to unpack.
• The stock has pulled back recently, with the share price down 3.8% over the last week and 7.7% over the past month, but it is still up 19.2% year to date and 190.3% over 5 years.
• Behind these moves, investors have been reacting to a steady stream of clinical and regulatory updates around argenx's autoimmune pipeline, as well as growing adoption of its lead therapies in key markets. At the same time, shifting sentiment across high growth biotech has added some volatility, which makes it even more important to separate the story from valuation reality.
• Right now, our valuation framework gives argenx a 4/6 value score, suggesting the market may be underestimating parts of its long term potential. Next, we will break down how traditional valuation methods look at argenx, and finish with a more holistic way to decide what the stock is really worth.

argenx delivered 21.4% returns over the last year. See how this stacks up to the rest of the Biotechs industry.

Approach 1: argenx Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow model estimates what a business is worth by projecting the cash it can generate in the future and then discounting those cash flows back to today, to account for risk and the time value of money.

For argenx, the model starts from last twelve months Free Cash Flow of about $278.9 million, then uses analyst forecasts for the next few years and extrapolates further out. On this basis, Simply Wall St projects Free Cash Flow rising to roughly $6.7 billion by 2035, reflecting strong expected scaling of the business over the next decade.

Bringing all those projected cash flows back to today using a 2 Stage Free Cash Flow to Equity model gives an estimated intrinsic value of about €2,110.6 per share. Compared with the current market price, this implies argenx is trading at roughly a 65.5% discount, which indicates investors may be significantly underpricing its long term cash generation potential.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests argenx is undervalued by 65.5%. Track this in your watchlist or portfolio, or discover 917 more undervalued stocks based on cash flows.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for argenx.

Approach 2: argenx Price vs Earnings

For profitable biotechs like argenx, the Price to Earnings (PE) ratio is a useful way to gauge how much investors are willing to pay today for each euro of current earnings. In general, higher growth prospects and lower perceived risk justify a higher, more typical PE ratio, while slower growth or higher uncertainty should pull that multiple down.

argenx currently trades on a PE of about 34.1x, which is higher than the broader Biotechs industry average of around 27.1x, but well below its peer group average of roughly 84.0x. To move beyond these blunt comparisons, Simply Wall St uses a proprietary Fair Ratio for PE, which estimates what argenx’s multiple should be after factoring in its earnings growth outlook, risk profile, profitability, industry, and market cap. For argenx, that Fair Ratio sits near 36.2x, suggesting the stock’s current PE is slightly below what its fundamentals would typically warrant.

On this basis, argenx appears modestly cheap rather than stretched, even after its strong run.

Result: UNDERVALUED

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Upgrade Your Decision Making: Choose your argenx Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives, a simple framework on Simply Wall St’s Community page that lets you write the story behind your numbers by linking your view of argenx’s business, growth drivers, and risks to specific revenue, earnings, and margin forecasts. It then turns those into a Fair Value you can compare with today’s share price to decide whether to buy, hold, or sell, with that Fair Value updating automatically as new news or earnings arrive. For example, a bullish argenx Narrative might assume faster Vyvgart uptake, more indications, and a higher long term margin profile that supports a Fair Value closer to about €885 per share. A more cautious Narrative could instead focus on competition, pricing pressure, and product concentration risk to justify a Fair Value nearer €480, both using the same tool but reflecting different, clearly articulated perspectives.

Do you think there's more to the story for argenx? Head over to our Community to see what others are saying!

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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