Nanobiotix (ENXTPA:NANO): Valuation Update Following Promising Clinical Data and Strong Financial Results

Nanobiotix (ENXTPA:NANO) is drawing a lot of market attention following the recent presentation of encouraging Phase 1 clinical data for JNJ-1900 (NBTXR3) in both esophageal and head and neck cancers. The timing comes at the same time as improvements in the company’s interim financial results, raising questions about future growth potential.

See our latest analysis for Nanobiotix.

Nanobiotix’s latest clinical breakthroughs and a turnaround in financial performance have supercharged momentum, with the share price soaring by 173% over the past month and by 629% year-to-date. In the long term, total shareholder returns have outpaced peers and reflect fast-rising optimism around its pipeline and technology.

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With shares reaching all-time highs and optimism running high, the key question is whether Nanobiotix remains undervalued or if the market has already factored in all future growth potential. This situation is making investors wonder if there is still a buying opportunity.

DCF Valuation: Share Price Stretches Far Above Our Model

Our SWS DCF model estimates Nanobiotix’s fair value to be €9.77 per share. The last close sits at €22.40, which is more than double the calculated value. This means Nanobiotix is trading well above its DCF-based fair value.

The DCF (Discounted Cash Flow) model works by projecting a company’s future cash flows and discounting them back to today’s value. This provides a fundamental anchor for valuation. For a biotech at Nanobiotix’s growth stage, where near-term profitability is yet to be achieved, DCF gives insight into the market’s optimism versus the fundamentals.

Currently, the share price momentum appears to have raced ahead of modelled expectations. This suggests investors are betting on upside beyond what the DCF model projects. This is especially notable given the company’s unprofitable status and rapidly changing revenue forecast.

Look into how the SWS DCF model arrives at its fair value.

Result: DCF Fair value of €9.77 (OVERVALUED)

However, unexpected clinical setbacks or a miss on revenue growth could quickly temper the current enthusiasm and shift market sentiment against Nanobiotix.

Find out about the key risks to this Nanobiotix narrative.

If you’re watching shares of XYZ Corp, it’s worth noting the stock experienced a significant drop in morning trading. Investors responded to the company’s announcement of quarterly earnings, which underperformed analyst expectations. The CEO stated that supply chain disruptions, along with higher input costs, impacted overall profitability for the period. Analysts have pointed out that although revenue grew modestly year-over-year, profit margins were narrower than in previous quarters. The company has outlined a series of strategic initiatives aimed at addressing these challenges and expects to provide additional updates in the coming months. Shares of XYZ Corp closed down more than 5 percent on the day. The broader market also traded lower, reflecting ongoing concerns about inflation and rising interest rates.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Nanobiotix 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 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 Nanobiotix Narrative

If you see things differently or want to explore the details further, you can quickly build your own thesis and perspective in just a few minutes. You also have the option to Do it your way.

A great starting point for your Nanobiotix research is our analysis highlighting 1 key reward 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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