Absci (ABSI): Assessing Valuation Following New AI Partnership with Oracle and AMD

Thinking about what to do with Absci (ABSI) stock after its recent announcement? You are not alone. Absci just revealed a technology partnership with Oracle Cloud Infrastructure and AMD that could be a tipping point for its AI-powered drug discovery ambitions. By teaming up, these companies aim to streamline Absci’s biologics design cycles, make simulations more efficient, and reduce operational costs. That is the kind of event that tends to spark fresh questions from both growth seekers and skeptics.

So far this year, Absci shares have been under pressure, with the stock down 34% over the past year and momentum still negative since January. But the company has not been standing still. A string of partnerships and collaborations has put collaboration at the core of Absci’s strategy. From expanding its pipeline to onboarding new scientific talent and securing $64 million in funding, Absci is betting big on advancing its AI platform even as the market remains cautious.

Now the real question is, does this latest technology play mean there is untapped upside in Absci’s valuation, or is the potential already priced in?

Price-to-Book Ratio of 2.2x: Is it justified?

Based on the price-to-book (P/B) ratio, Absci appears reasonably valued compared to similar peers, but it is considered expensive against the broader U.S. Biotechs industry. The company’s P/B ratio stands at 2.2x versus a peer average of 2.5x and precisely matches the industry average.

The price-to-book ratio measures the market’s valuation of a company relative to the book value of its assets. For unprofitable biotech companies like Absci, this metric offers investors a way to assess value without relying on earnings or revenue multiples that may not be meaningful during periods of heavy investment and negative profits.

This close alignment suggests that the market views Absci’s current asset base and future prospects as consistent with sector expectations. While there may not be any immediate deep discount, the valuation suggests investor neutrality as they wait for growth or profitability to materialize.

Result: Fair Value of $2.55 (ABOUT RIGHT)

See our latest analysis for Absci.

However, persistent negative returns and ongoing net losses could weigh on investor optimism. This may challenge Absci’s growth narrative if improvements do not materialize soon.

Find out about the key risks to this Absci narrative.

Another View: What Does the SWS DCF Model Say?

Switching perspectives, our SWS DCF model focuses on cash flows instead of asset values. It indicates that there is not enough reliable data to determine whether Absci is undervalued or overvalued at this time. Does this uncertainty reveal overlooked risks or hidden opportunities?

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

Stay updated when valuation signals shift by adding Absci to your watchlist or portfolio. Alternatively, explore our screener to discover other companies that fit your criteria.

Build Your Own Absci Narrative

If you have a different perspective or want to dive deeper into the numbers yourself, you can craft your own Absci view in just a few minutes. Do it your way.

A great starting point for your Absci 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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