How Does Dynavax Stack Up After 7% Climb and New Product Developments?

Thinking about what to do with Dynavax Technologies stock right now? You are definitely not alone. With the share price closing recently at $10.46, there are plenty of mixed signals out there for investors weighing the next move. On the surface, some might be put off by the year-to-date drop of nearly 19%, or by the negative returns over the last one and three years. But take a closer look and you will see that the stock has actually climbed 7% in the past month and posted a solid 3.4% gain this past week. These signals suggest that sentiment may be shifting and risk perceptions are changing.

Recent product updates and developments on immunization fronts have kept Dynavax in industry headlines, helping fuel renewed optimism and possibly explaining the uptick in short-term performance. That big 161.5% five-year return cannot be ignored either, offering some longer-term perspective for anyone worrying about recent turbulence.

Where things get interesting, especially for value-focused investors, is Dynavax’s strong showing across key valuation metrics. On a scale that adds a point for each of six undervaluation checks, the company scores a 5, suggesting it is undervalued in five out of six important measures. This sets the stage for a closer look at the numbers, as we break down those valuation methods to see just where Dynavax Technologies stands right now. And if you really want to cut through the noise, don’t worry, because we will wrap up with one approach that could give the clearest picture yet of what this stock is truly worth.

Why Dynavax Technologies is lagging behind its peers

Approach 1: Dynavax Technologies Discounted Cash Flow (DCF) Analysis

The Discounted Cash Flow (DCF) model is a widely used approach that estimates a company’s intrinsic value by projecting its future cash flows and then discounting those amounts back to their present value. For Dynavax Technologies, this method offers a focused look at both current performance and anticipated growth based on cash generation.

Dynavax’s latest twelve-month free cash flow stands at $70.5 million. Analyst forecasts see this figure rising steadily, with estimates reaching $160 million by 2029, and further extrapolations boosting that number up to $241.7 million by 2035. All projections and historical cash flows are presented in US dollars, with analyst projections covering the next five years and longer-term figures extrapolated using recent growth trends.

After processing these inputs, the DCF model calculates an intrinsic fair value of $35.09 per share. With Dynavax stock recently closing at $10.46, this implies a sizable 70.2% discount. This means the shares are trading well below what the company’s cash flows suggest they are worth.

Result: UNDERVALUED

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

Our Discounted Cash Flow (DCF) analysis suggests Dynavax Technologies is undervalued by 70.2%. Track this in your watchlist or portfolio, or discover more undervalued stocks.

Approach 2: Dynavax Technologies Price vs Sales

The Price-to-Sales (P/S) ratio is often the preferred metric when valuing biotech companies like Dynavax Technologies, especially when profits are inconsistent or growth is still underway. This multiple helps investors understand how the market values the company relative to its annual revenue. This is crucial in sectors where earnings may fluctuate due to research investments or product lifecycles.

Growth prospects and risk profiles heavily influence what counts as a “normal” or “fair” P/S ratio. Fast-growing companies or those with lower risk profiles typically warrant a higher ratio, as investors expect bigger returns down the line. Comparing Dynavax’s current P/S ratio of 3.88x to the biotech industry average of 11.35x and a peer average of 8.73x shows Dynavax is trading at a significant discount.

However, to get an even more tailored benchmark, Simply Wall St’s “Fair Ratio” steps beyond basic comparisons. The Fair Ratio for Dynavax is calculated at 3.91x and adjusts for factors specific to the company, such as its earnings growth outlook, industry dynamics, profit margins, market cap, and risk level. This makes the Fair Ratio a more nuanced and accurate yardstick for fair value than simple peer or industry averages. Since Dynavax’s current P/S ratio is almost identical to its Fair Ratio, the stock appears to be trading at a price that reflects its fundamentals.

Result: ABOUT RIGHT

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 Dynavax Technologies Narrative

Earlier, we mentioned there's an even better way to understand a company's valuation, so let's introduce you to Narratives. A Narrative is your personal story for a stock, a perspective that goes beyond the spreadsheet by combining your outlook for revenue, profits, and margins into a clear financial forecast and resulting fair value. By directly linking Dynavax Technologies’ business story to the numbers, Narratives make it simple for any investor to see how a company’s journey and potential translate into an actionable share price.

Available and easy to use right within the Simply Wall St Community page, Narratives empower millions of investors to set out their forecast, estimate fair value, and instantly weigh that against the current share price, all in one interactive place. Whenever fresh news or results come out, your Narrative updates automatically, keeping decisions current and relevant.

For example, some Dynavax Technologies investors believe the expanding vaccine market and new product launches make a $32.00 fair value reasonable, while others worry about product concentration and set a much lower $11.00 estimate. Both approaches are captured and tracked through Narratives. All of this helps you make smarter, more dynamic decisions about buying, holding, or selling, grounded in your own perspective and the latest data.

Do you think there's more to the story for Dynavax Technologies? 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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