A Look at Alkermes (ALKS) Valuation Following Mixed Q3 Revenue and Earnings Results

Alkermes (ALKS) just reported its third-quarter and nine-month results, catching the eye of investors. While revenue climbed compared to last year, both net income and earnings per share experienced a year-over-year dip during the period.

See our latest analysis for Alkermes.

Following its latest results, Alkermes’ shares have seen some renewed interest, with a 16.8% share price return over the past 90 days and year-to-date gains adding up to 8.1%. However, the 6.1% total shareholder return over the past year points to more modest long-term momentum, as the market weighs Alkermes’ recent mixed earnings in relation to its strong three- and five-year total returns.

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With shares still trading at a notable discount to analysts’ price targets, investors now face a familiar question: is Alkermes undervalued after its latest results, or is long-term growth already reflected in the current price?

Most Popular Narrative: 27% Undervalued

With Alkermes last closing at $31.07 and the narrative assigning a fair value of $42.53 per share, the stock’s future, according to this widely followed viewpoint, appears to hold significant upside. This perspective draws on updated expectations following acquisition activity, profit margin improvements, and a more optimistic business outlook.

Analysts highlighted that the Avadel Pharmaceuticals acquisition is expected to provide immediate revenue contributions, expand Alkermes’ commercial footprint, and support new growth avenues without overextending its financial resources. Recent clinical updates on alixorexton in narcolepsy type 1 were generally deemed solid and in line with expectations. Analysts noted the potential for a meaningful market share in this therapeutic area.

Read the complete narrative.

How does this new narrative justify such a bullish price target? It comes down to bold projections about future sales and profit margins, making the valuation feel almost tech like. Wondering what metrics this consensus sees as game changers in Alkermes’ business model? Read on to discover the financial drivers shaping this forecast.

Result: Fair Value of $42.53 (UNDERVALUED)

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

However, what could quickly challenge this bullish outlook are regulatory hurdles surrounding new treatments, as well as pressure on Alkermes’ core product portfolio from increased competition.

Find out about the key risks to this Alkermes narrative.

Build Your Own Alkermes Narrative

If the current consensus does not reflect your perspective, or you want to draw your own conclusions, you can build a custom narrative using the available data in just a few minutes. Do it your way

A good starting point is our analysis highlighting 3 key rewards investors are optimistic about regarding Alkermes.

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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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