Krystal Biotech (KRYS): Assessing Valuation Following Strong Q3 Results and Global Expansion Moves

Krystal Biotech (KRYS) is drawing fresh attention after reporting strong third quarter results. The report included higher gross margins and impressive revenue from its VYJUVEK therapy. The company is also expanding into Europe, Asia, and the Middle East.

See our latest analysis for Krystal Biotech.

Momentum has clearly been building for Krystal Biotech. After a quieter start to the year, shares have surged more than 40% over the last 90 days, and the one-year total shareholder return now stands at a healthy 14.6%. These gains reflect growing confidence in the company's execution and long-term global potential.

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But with such a strong run and ambitious international plans now public, investors have to ask whether Krystal’s recent gains leave room for further upside or if the latest results are already fully reflected in the share price.

Most Popular Narrative: 8.5% Undervalued

Krystal Biotech’s most popular narrative places its fair value at $223, roughly 8.5% above the last close of $204.1. This sets the stage for a valuation debate fueled by expectations of strong international growth, higher margins, and pipeline momentum.

The expansion of Krystal's pipeline, including imminent and near-term clinical readouts in lung disease (AATD, CF), ophthalmology, oncology (NSCLC), and aesthetics, leverages increased R&D productivity, which could drive future revenue growth and diversify earnings beyond a single product.

Read the complete narrative.

Curious how this narrative calculates such a premium? The story hinges on bold growth projections, ambitious profitability targets, and a future earnings outlook that is anything but typical for biotechs. Dive in to see which financial signals might surprise you and shape the next move for Krystal’s share price.

Result: Fair Value of $223 (UNDERVALUED)

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

However, uncertainty around VYJUVEK’s patient adoption patterns and potential regulatory setbacks in new markets could quickly challenge these optimistic forecasts.

Find out about the key risks to this Krystal Biotech narrative.

Another View: PE Ratio Challenges the Narrative

Looking at the market's go-to multiple, Krystal Biotech trades at 29.8 times earnings, which is noticeably higher than the US Biotechs industry average of 17.5x and above its fair ratio of 25.7x. While this premium could reflect optimism about future growth, it also increases the risk if earnings fall short. Does the company’s growth trajectory really justify paying such a high price, or are investors being swept up in the excitement?

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

Build Your Own Krystal Biotech Narrative

If you see things differently or want to dig into the numbers yourself, you can easily craft your own take in just a few minutes. Do it your way

A good starting point is our analysis highlighting 3 key rewards investors are optimistic about regarding Krystal Biotech.

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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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