Aurinia Pharmaceuticals (NasdaqGM:AUPH) Valuation in Focus After New LUPKYNIS Data Presentations Announced

Aurinia Pharmaceuticals (AUPH) is getting attention after announcing that five new posters will be presented at major conferences. This puts a spotlight on fresh data for its flagship drug, LUPKYNIS, in lupus nephritis.

See our latest analysis for Aurinia Pharmaceuticals.

Momentum has clearly been building for Aurinia Pharmaceuticals, with a 33.8% share price gain over the past 90 days and a year-to-date share price return of 31.7%. Excitement around new LUPKYNIS data has likely played a role, and total shareholder return over the past year sits at a robust 64.3%. This is a reassuring sign for those in it for the long haul, even after a bumpy five-year stretch.

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With shares trading just below analyst targets despite strong recent gains, the question is whether Aurinia shares are still undervalued or if the latest wave of optimism means future growth is already priced in.

Most Popular Narrative: 1.4% Undervalued

With the consensus fair value set at $11.71, Aurinia Pharmaceuticals recently closed at $11.55, leaving a razor-thin margin between current price and analyst expectations. Investors are watching closely to see whether projected growth can push these shares higher from here.

Operational efficiency improvements, including a strategic 2024 restructuring and focus on cost management, have driven gross margin expansion (from mid-80s to near 90%) and significant increases in operating leverage. These factors are likely to enhance net margins even as R&D spending increases. (Net margins)

Read the complete narrative.

Want to see what’s powering this near fair value call? Massive margin expansion and heavy bets on operational leverage are setting the bar. But does the full narrative reveal more bold assumptions or lurking surprises behind that consensus price?

Result: Fair Value of $11.71 (UNDERVALUED)

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

However, heavy reliance on LUPKYNIS and tough regulatory hurdles could quickly derail even the most optimistic forecasts for Aurinia's continued growth.

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

Another View: What Do Multiples Say?

While consensus sees Aurinia Pharmaceuticals right near fair value, a look at its price-to-earnings ratio paints a different picture. Shares trade at 25.1 times earnings, which is noticeably higher than the US biotech industry average of 16.4x and above the fair ratio of 18.5x. This premium suggests investors have high expectations, which could leave little room for error if growth slows. Is the market getting ahead of itself, or is strong performance worth the extra price?

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

Build Your Own Aurinia Pharmaceuticals Narrative

If you think the story looks different from your perspective, or prefer hands-on research, you can piece together your own take in just a few minutes with our Do it your way

A great starting point for your Aurinia 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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