Black Diamond Therapeutics (BDTX): Valuation Check After New Phase 2 Silevertinib Data and Glioblastoma Trial Plans

Black Diamond Therapeutics (BDTX) just released topline Phase 2 data for its EGFR inhibitor silevertinib in frontline non small cell lung cancer, while also laying out plans for a randomized Phase 2 trial in newly diagnosed glioblastoma.

See our latest analysis for Black Diamond Therapeutics.

The latest silevertinib update landed against a choppy backdrop for Black Diamond Therapeutics, with a sharp 1 day share price return of negative 22.03 percent and a 7 day share price return of negative 28.84 percent. However, a still positive year to date share price return of 25.70 percent signals that long term optimism has not fully unwound, even as near term momentum cools and investors reassess the risk reward trade off.

If this kind of binary clinical risk has your attention, it may be a good moment to explore other oncology and biotech names through healthcare stocks and see what else fits your watchlist.

With shares still up year to date but deeply below analyst targets, are investors overly discounting clinical risk, or has Black Diamond’s pipeline progress already been fully reflected in the price, leaving limited upside from here?

Price-to-Earnings of 7.1x: Is it justified?

At a last close of $2.69, Black Diamond Therapeutics trades on a price-to-earnings ratio of 7.1x, pointing to a market valuation that looks restrained relative to peers.

The price-to-earnings, or P/E, ratio compares a company’s share price with its earnings per share. It is a useful shorthand for how much investors are paying for each dollar of profit. For a clinical stage oncology company that has only recently become profitable, a low P/E can suggest the market doubts the durability of those earnings or is bracing for future declines.

In Black Diamond’s case, the current 7.1x P/E sits well below both the broader US market average of 18.5x and the US biotech industry average of 19.2x, as well as the 25.9x peer average. This underscores how heavily discounted the shares are on this metric. Even against an estimated fair P/E ratio of 7.6x, the stock still trades at a slight markdown, implying room for the valuation to move closer to that fair level if earnings prove more resilient than current forecasts suggest.

Explore the SWS fair ratio for Black Diamond Therapeutics

Result: Price-to-Earnings of 7.1x (UNDERVALUED)

However, clinical setbacks for silevertinib or slower progress across its MasterKey pipeline could quickly erode confidence in those seemingly discounted earnings.

Find out about the key risks to this Black Diamond Therapeutics narrative.

Build Your Own Black Diamond Therapeutics Narrative

If you see the story differently or want to dig into the numbers yourself, it only takes a few minutes to build your own view: Do it your way.

A great starting point for your Black Diamond Therapeutics 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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