A Look at Apellis Pharmaceuticals’s Valuation Following Strong Third Quarter Profit Turnaround (APLS)

Apellis Pharmaceuticals (APLS) posted third quarter earnings showing a big shift from the prior year. The company moved from a net loss to a strong net profit as revenue more than doubled compared to last year.

See our latest analysis for Apellis Pharmaceuticals.

Despite Apellis’s jump to profitability and surging third quarter revenue, the share price has slipped recently, with a 1-month share price return of -22.33% and a total shareholder return of -33.32% over the past year. The latest earnings report may be a turning point, but so far, momentum remains under pressure as investors continue to weigh the long-term outlook.

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With shares down sharply despite robust third quarter results and a healthy discount to analyst price targets, investors may wonder whether Apellis is an overlooked bargain or if the market already anticipates future growth ahead. Could this be a buying opportunity?

Most Popular Narrative: 46.5% Undervalued

Apellis Pharmaceuticals is trading at a significant discount to the fair value suggested by the most widely followed investor narrative. This valuation creates an intriguing divide between the recent stock price pullback and expectations for future growth.

The recent FDA label expansion for EMPAVELI into rare kidney diseases (C3G and IC-MPGN), along with active plans to launch and pursue additional indications (FSGS and DGF), positions Apellis to access larger patient pools and accelerate long-term topline growth, driven by the increasing prevalence of rare and age-associated diseases. This is likely to result in higher future revenues and market diversification.

Read the complete narrative.

What is driving the sky-high valuation behind Apellis’s stock? The narrative relies on ambitious projections for both revenue and margins—projections usually reserved for sector leaders. Uncover the bold assumptions and see if the growth story really stacks up.

Result: Fair Value of $36.50 (UNDERVALUED)

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

However, persistent access barriers or slower than expected SYFOVRE adoption could challenge the bullish outlook and dampen Apellis’s expected revenue growth trajectory.

Find out about the key risks to this Apellis Pharmaceuticals narrative.

Another View: Multiples Reveal a Caution Flag

While fair value estimates suggest Apellis is attractively discounted, the stock actually trades at a price-to-earnings ratio of 54.9 times. This is much higher than the Biotechs industry average of 17.1 and well above the fair ratio of 33.5 times. This sizable gap can signal heightened valuation risk if market sentiment shifts or performance falters. Could this disconnect be a warning sign that outpaces the optimism?

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

Build Your Own Apellis Pharmaceuticals Narrative

If you have a different perspective or want to dig deeper yourself, you can quickly craft your own view based on the latest facts in just a few minutes. Do it your way

A great starting point for your Apellis Pharmaceuticals research is our analysis highlighting 3 key rewards and 2 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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