Is There Now an Opportunity in Valneva After Its 111% Surge in 2025?

Thinking about what to do with Valneva stock right now? You're not alone. After an eye-catching 111.0% gain so far this year and a robust 31.8% jump over the past month, anyone curious about biotech movers is watching Valneva a bit closer. Seven-day returns are strong too, up 6.5%. However, if you zoom out to three or five years, you’ll see the stock is still deep in the red, trailing by over 20%. That’s quite a ride, which makes any decision more interesting for investors navigating both recent optimism and long-term scars.

What’s fueling the momentum this year? A mix of positive market sentiment for COVID-19 and travel vaccine producers, along with renewed risk appetite among investors, has clearly added some tailwind. At the same time, not all of Valneva’s price action is purely about fundamentals. It’s also about new hopes for revenue growth and improving margins as the world keeps reimagining health and travel post-pandemic.

So, is Valneva a screaming buy, or is caution the wiser move? A quick headline: Valneva earns a valuation score of 4 out of 6 on our checklist of undervaluation factors, which strongly suggests it may still be trading below fair value by several standards. But before you jump in, let’s step through those valuation methods in detail. And stick around, because there’s a smarter approach to understanding a stock’s real worth that we’ll explore at the end.

Valneva delivered 84.1% returns over the last year. See how this stacks up to the rest of the Biotechs industry.

Approach 1: Valneva Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow (DCF) model projects a company’s future free cash flows and discounts them back to their present value, aiming to estimate what the company is truly worth today. This approach is widely used for stocks with unpredictable earnings but measurable cash flow potential, such as Valneva.

Based on the latest figures, Valneva’s last twelve months of free cash flow sits at around -23.7 Million €. Looking forward, analyst projections and further extrapolation suggest a sharp turnaround. In about five years, annual free cash flow is expected to switch from negative to positive and reach approximately 161.5 Million € by 2035. These projections are essential, as the DCF model relies on both near-term analyst inputs and longer-term assumptions to gauge the true economic value of the business.

Crunching these cash flow estimates through a 2 Stage Free Cash Flow to Equity DCF model, the intrinsic value for Valneva comes out at 15.05 € per share. This is about 67.6% higher than the current market price, signaling a significant undervaluation.

Result: UNDERVALUED

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

Our Discounted Cash Flow (DCF) analysis suggests Valneva is undervalued by 67.6%. Track this in your watchlist or portfolio, or discover more undervalued stocks.

Approach 2: Valneva Price vs Sales (P/S)

The Price-to-Sales (P/S) ratio is a preferred valuation metric for companies like Valneva, especially if they are early in their profitability journey or reinvesting heavily for growth. The P/S ratio helps investors compare a company's valuation to its sales rather than earnings, which can be skewed by volatile profits or losses. Typically, higher P/S ratios are justified if a company is expected to grow sales rapidly or has low business risks. Lower ratios make sense for slower-growth or riskier firms.

Currently, Valneva trades at a P/S ratio of 4.26x. For context, the Biotechs industry average is 4.35x. Peers in the sector are priced even higher, with a peer average of 18.81x. This suggests Valneva is not priced aggressively compared to its immediate competitors or the broader sector, but it does not stand out as a bargain based solely on these raw multiples.

Simply Wall St’s Fair Ratio offers a more tailored benchmark than peer or industry comparisons. It is calculated by weighing factors such as Valneva's expected sales growth, profit margins, size, and risk profile, providing a more holistic sense of what would be a reasonable multiple for this specific company. For Valneva, the calculated Fair Ratio is 1.95x. This is notably lower than both its current 4.26x and the industry average. This suggests that relative to its actual fundamentals and risk factors, the market may be valuing Valneva on the higher side.

Result: OVERVALUED

PS 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 Valneva Narrative

Earlier we mentioned there is an even better way to understand valuation, so let’s introduce you to Narratives. A Narrative is your story about the company’s future. It is an easy way to connect what you believe about Valneva’s prospects (such as a breakthrough Lyme vaccine or global demand for preventative healthcare) with specific forecasts for revenue, earnings, and margins, all leading to your own fair value estimate.

Narratives let you tie together the numbers and the “why” in one place. Available on Simply Wall St’s Community page (used by millions of investors), Narratives act as simple and flexible investment plans. They show at a glance where Fair Value stands compared to the current Price, helping you decide if it is time to buy or sell. Because Narratives update automatically as news or financial results arrive, you are always working from the latest information.

With Valneva, for example, some investors may create an optimistic Narrative expecting over 20% yearly revenue growth and a €9.5 price target, driven by rapid vaccine development and operational improvements. Others might focus on risks such as regulatory hurdles and high R&D costs to support a more conservative €3.75 target. Narratives help you make decisions based on your convictions and adjust as the facts change.

Do you think there's more to the story for Valneva? 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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