Assessing Liquidia (LQDA) Valuation After Strong Q3 Earnings Beat and Surging Yutrepia Sales

Liquidia (LQDA) just cleared a big hurdle in its third quarter, topping Wall Street expectations as Yutrepia sales outpaced forecasts, and the stock’s recent run suggests investors are starting to price in that momentum.

See our latest analysis for Liquidia.

That strength has fed directly into the tape, with a 21.5% 1 month share price return and a powerful 195.5% 1 year total shareholder return, signaling momentum is clearly building rather than fading.

If Liquidia’s surge has you rethinking your healthcare exposure, this could be a good moment to explore other potential movers across healthcare stocks.

Yet with shares already up nearly 200 percent over the past year and still trading below consensus targets, investors now face a key question: is Liquidia a rare undervalued growth story, or is the market already discounting the next leg of expansion?

Price-to-Sales of 42.6x: Is it justified?

On a price-to-sales basis, Liquidia looks richly valued at a 42.6x multiple, especially when set against its latest close at $33.92.

The price-to-sales ratio compares the company’s market value to its revenue. It is a common yardstick for high growth, currently unprofitable biopharma names where earnings are not yet a reliable guide.

For Liquidia, the market appears to be front loading expectations of rapid revenue expansion and a future shift into profitability. That enthusiasm comes at a steep premium versus both peers and the level our fair value work suggests the ratio could eventually gravitate toward.

Against the wider US Pharmaceuticals industry, where the average price-to-sales multiple sits around 4x, Liquidia’s 42.6x stands out as aggressively higher. Even compared with a fair price-to-sales ratio estimate of 16.2x, it still implies investors are paying more than double what that benchmark would indicate.

Explore the SWS fair ratio for Liquidia

Result: Price-to-Sales of 42.6x (OVERVALUED).

However, setbacks in Yutrepia’s commercialization or clinical development delays for pipeline asset L606 could quickly challenge the current growth and valuation narrative.

Find out about the key risks to this Liquidia narrative.

Another View: Our DCF Points the Other Way

While the sales multiple appears expensive, our DCF model suggests the opposite, indicating fair value near $196.66 per share, roughly six times the current price. If that cash flow path plays out, is the market still underrating Liquidia’s long term earnings power?

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 912 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 would rather follow your own process and interpret the numbers differently, you can build a personalized view of Liquidia in minutes: 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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