A Fresh Look at Alvotech (NasdaqGM:ALVO) Valuation as Investors Weigh Biotech Prospects

Alvotech (NasdaqGM:ALVO) shares have seesawed over the past month, with investors keeping an eye on the company’s financial performance and growth trajectory. The stock’s movement suggests a continued appetite for biotech as the story evolves.

See our latest analysis for Alvotech.

The latest ups and downs in Alvotech’s share price reflect shifting investor perceptions about risk and biotech sector momentum. While the 1-year total shareholder return sits at -33%, recent volatility may signal changing sentiment as the company executes on growth plans and navigates industry developments.

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But with strong recent revenue and profit growth, along with shares still trading at a discount to analyst targets, the key question is whether Alvotech is truly undervalued or if the market is fully pricing in future gains.

Most Popular Narrative: 53.1% Undervalued

With Alvotech’s fair value narrative set at $17.50, the closing price of $8.20 points to substantial upside if the narrative’s bold projections materialize. This sets the scene for financial and strategic catalysts that could redraw Alvotech’s valuation landscape in the coming years.

Ongoing launch and approval pipeline activity, including upcoming regulatory decisions in major global markets (for AVT03, AVT05, AVT23, and others), positions the company to tap into blockbuster biologic markets coming off-patent. This could potentially drive a step-change in topline revenue once approvals are secured.

Read the complete narrative.

Curious what bold assumptions and future milestones anchor this staggering fair value? It comes down to a trio of aggressive top-line expansion, surging margins, and a profit trajectory few biotechs dare predict. Do you want to peek behind the curtain at the numbers and outlook behind this forecast? The full narrative spells out the secrets powering this potential breakout.

Result: Fair Value of $17.50 (UNDERVALUED)

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

However, delays in regulatory approvals or intensifying price competition could quickly disrupt Alvotech’s growth story and test the bullish case for upside.

Find out about the key risks to this Alvotech narrative.

Another View: A Multiple-Based Perspective

While Alvotech’s fair value narrative suggests undervaluation, a look at its price-to-earnings ratio tells a different story. Trading at 40.5x earnings, Alvotech is more expensive than both the biotech industry average of 17.2x and the fair ratio of 29.1x. This sizable gap highlights valuation risk if the market shifts toward more typical multiples.

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

Build Your Own Alvotech Narrative

If you want a fresh perspective or prefer diving into the numbers yourself, you can quickly put together your own personalized thesis in just minutes with Do it your way.

A great starting point for your Alvotech research is our analysis highlighting 3 key rewards 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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