Are Shares of Jazz Pharmaceuticals Set for Growth After Strong Q2 Results in 2025?

If you have Jazz Pharmaceuticals in your portfolio, or are considering it, you’re probably watching its stock chart with keen interest. The past year has rewarded patient holders, with Jazz shares up an impressive 27.5%. Even in just the last week, the stock charged ahead by 9.8%, a clear sign that investors are re-evaluating the company’s prospects in light of recent market developments. Over longer horizons, returns have been mixed, as Jazz is still digging out from a 10.3% decline over five years, but the shifts in risk perception and growth outlook are hard to ignore.

Many readers ask whether Jazz is actually undervalued, or if the rally is simply catching up with reality. Interestingly, a robust valuation framework covering six key checks gives Jazz a value score of 6, indicating the company comes out as undervalued across every single measure used. That is a rare feat, and it is one reason why the latest price moves are drawing even more attention to what is under the hood.

You might be sorting through different headlines and ratios, but what really matters is how you measure value, and which approach gives you the clearest picture. Next, we'll break down the main valuation methods and show you how Jazz stacks up by each one, before revealing a strategy that helps investors see beyond the numbers to make smarter decisions.

Jazz Pharmaceuticals delivered 27.5% returns over the last year. See how this stacks up to the rest of the Pharmaceuticals industry.

Approach 1: Jazz Pharmaceuticals Discounted Cash Flow (DCF) Analysis

The Discounted Cash Flow (DCF) model estimates a company’s intrinsic value by projecting its future cash flows and discounting them to today's value. This approach aims to determine what Jazz Pharmaceuticals is truly worth based on the money it is expected to generate going forward.

Currently, Jazz Pharmaceuticals reports a Free Cash Flow (FCF) of $1.13 billion, a figure that indicates strong profitability. Analyst consensus projects FCF growth each year for the next decade, using direct analyst estimates for the first five years and Simply Wall St’s extrapolations for the years that follow. By 2029, Jazz’s annual FCF is projected to reach around $2.03 billion, signaling an expectation of continued healthy expansion.

After summing and discounting these expected cash flows using a 2 Stage Free Cash Flow to Equity model, the estimated intrinsic value comes out to be $771.17 per share. Compared to the current share price, this suggests the stock is trading at a substantial 81.9% discount. According to this DCF analysis, the stock appears to be significantly undervalued.

Result: UNDERVALUED

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

Our Discounted Cash Flow (DCF) analysis suggests Jazz Pharmaceuticals is undervalued by 81.9%. Track this in your watchlist or portfolio, or discover more undervalued stocks.

Approach 2: Jazz Pharmaceuticals Price vs Sales

For companies like Jazz Pharmaceuticals that generate healthy revenues but may face volatile earnings, the Price-to-Sales (P/S) ratio is a particularly meaningful valuation tool. Unlike earnings-based metrics, the P/S ratio avoids short-term profit swings and reflects the fundamental importance of sales as the foundation of long-term value. For profitable and growing firms, this multiple is especially effective at highlighting potential undervaluation when earnings may temporarily lag behind revenue growth.

Growth prospects and risk profile play a big role in setting what counts as a normal or fair P/S multiple. Companies with faster growth and lower risk usually justify higher P/S ratios, while firms with stagnating sales or higher uncertainty command lower ones.

Currently, Jazz trades at a P/S ratio of 2.07x. For context, this is less than half the pharmaceuticals industry average of 4.85x and sits well below the peer group average of 4.37x. On the surface, this suggests Jazz may be trading at a discount compared to its sector and direct competitors.

To sharpen this comparison, Simply Wall St’s Fair Ratio provides a more sophisticated benchmark. This proprietary metric estimates a fair P/S for Jazz by factoring in growth rates, profit margins, risk levels, company size, and its specific industry dynamics. It is a more precise measure than comparing to averages, since it customizes the standard for what a fair multiple should be based on the latest data and the unique characteristics of Jazz Pharmaceuticals.

Simply Wall St’s Fair Ratio for Jazz is 6.68x, substantially above the current P/S. This suggests the market is pricing Jazz at a significant discount to its expected fundamentals, further supporting the case for undervaluation.

Result: UNDERVALUED

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 Jazz Pharmaceuticals Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let's introduce you to Narratives. Rather than just relying on ratios or analyst targets, a Narrative lets you craft your own story for Jazz Pharmaceuticals by laying out what you expect for its future revenue, profits, and risks, and then instantly seeing how those beliefs flow through to a fair value estimate for the stock.

Narratives connect the dots between your unique perspective on the business, a forward-looking financial forecast, and an actionable estimate of fair value. On Simply Wall St's Community page, this powerful tool is available to everyone, giving millions of investors an easy way to build, share, or explore different scenarios for Jazz with just a few clicks.

With Narratives, you can decide whether Jazz is a buy, hold, or sell by directly comparing what you think the company is worth against today’s market price. Because Narratives update automatically as new information such as earnings, news, or regulatory decisions becomes available, you always have a living, dynamic anchor point for your decisions.

For example, one investor’s Narrative projects robust growth from new therapies and assigns a fair value of $230 per share, while a more cautious scenario sees regulatory risks capping fair value at $147. This offers a real-time way to test and sharpen your investment thesis.

Do you think there's more to the story for Jazz Pharmaceuticals? 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com