IDEAYA Biosciences (IDYA): Assessing Valuation After Analyst Optimism on Uveal Melanoma Therapy Results

IDEAYA Biosciences (IDYA) grabbed attention after analysts reiterated their positive outlook. They pointed to encouraging results from the darovasertib and crizotinib combination in metastatic uveal melanoma, as well as steady progress across its clinical pipeline.

See our latest analysis for IDEAYA Biosciences.

IDEAYA’s share price has gained momentum in recent months, jumping 28% over the last 90 days and delivering a solid 12% one-month share price return as clinical results and analyst optimism fueled buying. While the one-year total shareholder return is still slightly negative, long-term investors have seen their patience rewarded, with total returns of nearly 75% over three years and more than double over five years. This suggests that confidence in IDEAYA's pipeline is building again.

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With shares already climbing and price targets set significantly higher than the current level, investors are left wondering whether IDEAYA remains attractively priced or if the market has already accounted for its long-term growth prospects.

Price-to-Book of 2.5: Is it justified?

IDEAYA Biosciences trades at a price-to-book ratio of 2.5, which is notably lower than both its peer group and overall industry averages. This suggests the stock may be undervalued based on this measure.

The price-to-book ratio compares a company’s market value to its book value, which is the value of its assets minus liabilities. For biotechs like IDEAYA, this ratio can reflect how much investors are willing to pay relative to the company’s core assets and cash. This is especially relevant in the research-driven pharma sector, where profits may still be years away.

At 2.5 times, IDEAYA’s price-to-book ratio is well below the peer average of 4.6 times and slightly below the US Biotechs industry average of 2.6 times. This comparison strongly suggests investors may not be fully pricing in the company’s asset base or pipeline potential relative to others in the space.

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

Result: Price-to-Book of 2.5 (UNDERVALUED)

However, given IDEAYA’s ongoing net losses and high reliance on future clinical success, there is still meaningful risk for investors to consider.

Find out about the key risks to this IDEAYA Biosciences narrative.

Build Your Own IDEAYA Biosciences Narrative

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A great starting point for your IDEAYA Biosciences research is our analysis highlighting 1 key reward and 1 important warning sign 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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