Does Neurocrine Biosciences’ 9.8% Jump Signal a New Valuation Opportunity in 2025?

• If you have ever wondered whether Neurocrine Biosciences deserves a spot in your portfolio, you are not alone. Figuring out its fair value is where smart investing starts.
• The stock recently climbed 9.8% in just the past week and has delivered a solid 19.7% return over the last twelve months, catching the eye of growth-minded investors.
• This momentum has been fueled by increased attention on Neurocrine’s innovative therapies and positive updates on pipeline developments, with recent industry headlines highlighting growing excitement about progress in neurological drug approvals and partnerships.
• Currently, Neurocrine Biosciences has a valuation score of 2 out of 6. This signals there is more beneath the surface when it comes to what the market is pricing in. Up next, we will explore several standard ways to value the stock, but stay tuned because there is an even smarter approach worth knowing about before you make any big calls.

Neurocrine Biosciences scores just 2/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.

Approach 1: Neurocrine Biosciences Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow (DCF) model estimates the value of a company by projecting its future cash flows and discounting them back to today’s dollars. This approach gives investors a sense of what the business is truly worth, based on its expected ability to generate cash in the years ahead.

For Neurocrine Biosciences, the DCF model uses a 2 Stage Free Cash Flow to Equity method. The company’s most recent Free Cash Flow stands at $594.9 million. Looking ahead, analysts forecast this figure to rise steadily, with Free Cash Flow projected to surpass $1.2 billion by the end of 2029 according to consensus and model estimates.

Only five years of cash flow estimates come directly from analysts. Further projections are extrapolated by Simply Wall St to reflect longer-term growth expectations. This results in a calculated fair value of $249.08 per share.

With Neurocrine’s current valuation showing a 39.1% discount relative to this intrinsic estimate, the DCF analysis suggests that the stock is significantly undervalued at today’s prices.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Neurocrine Biosciences is undervalued by 39.1%. Track this in your watchlist or portfolio, or discover 927 more undervalued stocks based on cash flows.

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

Approach 2: Neurocrine Biosciences Price vs Earnings

The Price-to-Earnings (PE) ratio is widely used to value profitable companies because it directly connects a company’s share price to its earnings. For biotech companies like Neurocrine Biosciences, this multiple is particularly useful as it reflects both market optimism about future growth and its ability to generate profits today.

What qualifies as a fair or normal PE ratio depends on growth expectations and risk. Generally, faster expected earnings growth and lower risk justify a higher multiple, while lower growth or higher risk call for a lower PE.

Currently, Neurocrine Biosciences trades at a PE ratio of 35.3x, which is well above the biotech industry average of 19.1x and also higher than the peer average of 17.2x. At first glance, this premium might appear steep. However, it does not account for the company’s unique growth potential or risk factors.

This is where Simply Wall St’s proprietary “Fair Ratio” comes in. The Fair Ratio for Neurocrine is 25.3x, which adjusts for key factors like projected earnings growth, profit margins, risk profile, industry context, and company size. Unlike simple peer or industry comparisons, the Fair Ratio provides a more holistic view of what multiple is truly justified for Neurocrine right now.

Comparing the current PE of 35.3x to the Fair Ratio of 25.3x reveals that the stock’s market price is running ahead of where you would expect based on these company-specific fundamentals. This suggests that Neurocrine Biosciences stock is currently overvalued based on its earnings potential.

Result: OVERVALUED

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1433 companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Neurocrine Biosciences Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let's introduce you to Narratives. A Narrative is your personal view of a company’s future, a story that you craft based on your assumptions about things like revenue growth, profit margins, and risk, which then flows directly into a financial forecast and a fair value estimate. Narratives bridge the gap between company news and hard numbers by allowing you to link your perspective on Neurocrine Biosciences to dynamic models that recalculate fair value instantly as new information, such as earnings or product launches, emerges. This makes Narratives an accessible investing tool and a core feature of Simply Wall St’s Community page, already used by millions of investors. By comparing your Narrative’s fair value to the current share price, you can more confidently decide whether to buy, hold, or sell. For example, some investors see rapid pipeline progress and set a high fair value near $245 per share, while others, more cautious about margin pressure or regulatory risk, land closer to $125, which makes it clear how different views shape investing decisions.

Do you think there's more to the story for Neurocrine Biosciences? Head over to our Community to see what others are saying!

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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