A Fresh Look at Liquidia (LQDA) Valuation Following Strong Q3 Revenue Growth and Narrowed Net Loss

Liquidia (LQDA) just released its third quarter results, revealing revenue that jumped significantly from last year and a net loss that narrowed sharply compared to the same period in 2024. These numbers are catching investor attention right now.

See our latest analysis for Liquidia.

Liquidia has staged an impressive run this year, with strong financial results helping to power a remarkable 131.7% year-to-date share price return and a 1-year total shareholder return of 185%. Momentum remains robust as investors absorb both the latest quarterly numbers and recent conference presentations.

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With Liquidia’s share price soaring and recent financials delivering upside surprises, the real question now is whether the stock remains undervalued, or if the market has already factored in all the future growth potential.

Price-to-Sales of 35.2x: Is it justified?

Liquidia’s shares now trade at a price-to-sales ratio of 35.2, which is far above both peers and industry benchmarks, despite recent growth momentum and optimism around upcoming profitability.

The price-to-sales (P/S) ratio measures how much investors are paying for each dollar of a company's sales. This metric is especially relevant for biotech and pharmaceutical firms like Liquidia that may still be investing heavily and are not yet profitable. A high P/S ratio can indicate strong future growth expectations or, alternatively, a market valuation running ahead of company fundamentals.

At 35.2x, Liquidia’s P/S multiple is nearly nine times higher than the US Pharmaceuticals industry average of 4x and well above its peer group average of 2.7x. It is also more than double the estimated Fair Price-to-Sales Ratio of 14.9x, suggesting the current valuation could be stretched even with rapid revenue gains.

Explore the SWS fair ratio for Liquidia

Result: Price-to-Sales of 35.2x (OVERVALUED)

However, future growth could be challenged if revenue momentum slows or if the market reassesses elevated expectations for Liquidia’s path to sustained profitability.

Find out about the key risks to this Liquidia narrative.

Another View: Discounted Cash Flow Tells a Different Story

Switching gears to our SWS DCF model, the analysis finds Liquidia's shares trading well below the calculated fair value. This points toward significant undervaluation. While multiples indicate the stock may be expensive, DCF assumptions suggest there could be plenty of long-term upside. Which perspective will prove more accurate over time?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Liquidia for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 886 undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own Liquidia Narrative

If you’d rather dig into the numbers yourself, you can build your own investment narrative for Liquidia in just a few minutes and see where your perspective leads. Do it your way

A great starting point for your Liquidia research is our analysis highlighting 2 key rewards 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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