Are Alnylam Shares Still Attractive After a 110% Surge and Fresh Pipeline News?

Thinking about what to do with your Alnylam Pharmaceuticals shares, or wondering if now is the time to jump in? You’re not alone. The stock has been on a roll, boasting an eye-popping 110.3% year-to-date return and climbing 65.7% over the past year alone. Those kinds of gains demand a closer look, especially when recent months have brought both strong scientific progress and a flurry of new developments in the RNAi therapeutics space. With positive regulatory updates and a growing pipeline, investors are recalibrating what Alnylam could actually be worth in the long run.

It is not all blue skies and rocket ships, though. While there is clear excitement powering that 4.7% lift over the last week and an 8.3% jump in the last month, market sentiment has also shifted as competitors announce new partnerships and the company navigates evolving treatment reimbursement trends. That context matters when you are weighing whether to hold, buy, or cash out.

When it comes to valuation, here is where things get interesting: based on six widely used checks, Alnylam currently scores a 2. In other words, it appears undervalued on two out of six valuation measures, leaving plenty of room to debate how much upside is left. Let’s break down these valuation approaches, and stay to the end for a deeper dive into what really matters when putting a price tag on Alnylam.

Alnylam Pharmaceuticals scores just 2/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.

Approach 1: Alnylam Pharmaceuticals Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow (DCF) model projects a company's expected future cash flows and then discounts those amounts back to today's value. This helps investors estimate the company's intrinsic worth, independent of short-term market movements.

For Alnylam Pharmaceuticals, analysts forecast a significant turnaround in free cash flow. The latest reported figure is a negative $79.86 million, but projections show strong growth ahead, with free cash flow expected to reach approximately $3.88 billion by 2029. Looking further ahead, estimates suggest Alnylam's annual free cash flow could surpass $6.3 billion by 2035. The model uses these projections, drawn from both analyst consensus and further extrapolation, to estimate the present value of all expected future cash flows.

Based on these calculations, the model assigns an intrinsic value of $888.85 per share. With the current market price at a 44.7% discount to this fair value estimate, the DCF implies that Alnylam's stock is significantly undervalued at current levels.

Result: UNDERVALUED

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

Our Discounted Cash Flow (DCF) analysis suggests Alnylam Pharmaceuticals is undervalued by 44.7%. Track this in your watchlist or portfolio, or discover more undervalued stocks.

Approach 2: Alnylam Pharmaceuticals Price vs Sales

The Price-to-Sales (P/S) ratio is the preferred valuation metric for Alnylam Pharmaceuticals, especially given the company’s current stage. Biotech firms that are investing heavily in future growth, and might not yet be profitable, are often better analyzed by looking at revenues instead of earnings or book value. The P/S ratio allows investors to understand how much the market is valuing each dollar of the company’s sales regardless of current profitability.

When thinking about what constitutes a “normal” or “fair” P/S ratio, you need to consider both growth expectations and risk profile. Fast-growing companies in emerging markets or innovative industries often command higher P/S multiples, since investors are willing to pay up for future potential. Still, a lofty multiple might signal high market expectations or increased risk.

Alnylam trades at a P/S of 26.2x, well above the biotech industry average of 11.3x and peer average of 8.6x. While that may seem elevated, Simply Wall St’s Fair Ratio for Alnylam is 17.8x, a proprietary benchmark that integrates the company’s expected earnings growth, industry dynamics, profit margins, market cap, and unique risks. Unlike simple peer or industry comparisons, the Fair Ratio is designed to provide a more holistic and company-specific context by weighing all major factors that should affect valuation.

Comparing the company’s actual P/S multiple of 26.2x with the Fair Ratio of 17.8x suggests the market is placing a sizable premium on Alnylam shares, likely reflecting optimism about future sales growth. However, this also means the stock is currently overvalued by this metric.

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 Alnylam Pharmaceuticals Narrative

Earlier we mentioned there is an even better way to understand valuation, so let’s introduce you to Narratives. A Narrative is a clear story that ties together your expectations, assumptions, and forecasts about a company, not just what the numbers say, but why you think they will turn out that way. Narratives allow you to connect the dots between Alnylam’s science, market growth, competition, and your predicted fair value, all while mapping your perspective alongside others in the Simply Wall St Community, which millions of investors already use.

Narratives are an easy tool built right into the Community page, where you can see different users’ forecasts, compare fair values to current prices, and decide if you want to buy, hold, or sell based on logic you trust. Plus, these Narratives update automatically when new earnings, regulatory news, or clinical data is released, so your reasoning stays relevant in a fast-changing market.

For example, looking at Alnylam today, one investor may see RNAi therapies and global launches driving a fair value of $583 per share, while another, more cautious about profitability or payer pressures, sets their fair value closer to $236 per share. Narratives let you explore both sides and make decisions on your own terms.

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