A Fresh Look at Alkermes (ALKS) Valuation After Wells Fargo's Positive Rating and Q4 2025 Inclusion

Wells Fargo has given Alkermes (ALKS) a shot in the arm by adding the company to its Q4 2025 Tactical Ideas List and assigning an Overweight rating. The firm sees limited downside and suggests there is potential for Alkermes to outperform in the months ahead.

See our latest analysis for Alkermes.

Alkermes’ latest nod from Wells Fargo has helped sustain positive sentiment around the stock, which has quietly generated a solid 10% total shareholder return over the past year. With news flow remaining upbeat and momentum building, investors seem more optimistic about the company’s future prospects.

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With shares trading at a notable discount to Wall Street price targets despite strong returns, the key question for investors now is whether Alkermes is still undervalued, or if the market is already pricing in much of its future growth. Is there more upside ahead, or has the opportunity already been captured?

Most Popular Narrative: 24.8% Undervalued

With Alkermes’ last close at $31.26, the most widely followed narrative sees fair value at $41.59, a hefty premium, setting up a debate on whether market sentiment is missing something big.

Robust, above-expectation demand growth for Alkermes' proprietary neuroscience products (Vivitrol, Aristada, and Lybalvi), supported by expanding diagnosis rates and increased patient access through Medicaid and insurance, drives outsized revenue expansion and positions the company for continued top-line growth as global awareness of mental health disorders rises. Growing adoption and acceptance of long-acting injectables among clinicians and patients, combined with Alkermes' effective commercial execution and targeted salesforce expansion, are increasing market penetration for products like Aristada and contributing to higher volumes, which amplifies both revenue and operating leverage.

Read the complete narrative.

Curious what hidden assumptions are creating this bullish number? The narrative weaves a story of strong growth, margin shifts, and ambitious future profits, all riding on several bold forecasts. Want to see which projections could ignite or undermine those gains? Discover the pivotal details powering this fair value for Alkermes.

Result: Fair Value of $41.59 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, rising R&D costs and heavy reliance on a narrow product portfolio present real challenges that could quickly reshape Alkermes’ current growth outlook.

Find out about the key risks to this Alkermes narrative.

Another View: Market Ratios Tell a Different Story

Looking through the lens of the price-to-earnings ratio, Alkermes trades at 14.8x, which is higher than its estimated fair ratio of 14.2x but lower than both the US Biotechs industry at 17.2x and the peer average at 37.3x. For investors, this creates an intriguing mix of perceived value and caution. Could the market be signaling hidden risks or untapped potential with this gap?

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own Alkermes Narrative

If you have a different perspective or want to take a hands-on approach, it only takes a few minutes to build your own evidence-based view. Do it your way

A great starting point for your Alkermes research is our analysis highlighting 2 key rewards and 1 important warning sign 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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