Vaxcyte (PCVX): Assessing Valuation Following Major U.S. Manufacturing Expansion with Thermo Fisher

Vaxcyte (PCVX) just announced a new agreement with Thermo Fisher that brings dedicated fill-finish manufacturing for its broad-spectrum pneumococcal vaccines to the U.S. This marks a major step forward in their American supply strategy.

See our latest analysis for Vaxcyte.

While this U.S. manufacturing deal is a clear win for Vaxcyte’s supply strategy, it comes after a period of mixed performance for shareholders. The stock price has rebounded 36% in the past month alone but still sits 47% lower year-to-date, with the total shareholder return down 61% over the past year. The positive momentum seen recently hints at growing confidence; though long-term investors have weathered a bumpy ride.

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With shares still far below last year’s highs and recent news fueling optimism, is the market overlooking Vaxcyte’s future potential, or is renewed growth already reflected in the price?

Price-to-Book of 1.9x: Is it justified?

Vaxcyte shares trade at a price-to-book ratio of 1.9, notably lower than both the US Biotechs industry average of 2.5x and the peer average of 7x. This comparison hints at market skepticism or potential undervaluation relative to its sector.

The price-to-book ratio compares a company's market value to its book value, offering insight into how much investors are paying for each dollar of net assets. This metric is particularly relevant for biotech firms like Vaxcyte that are still in growth phases and may not yet be profitable. It reflects the market’s view of future growth potential and balance sheet health.

At 1.9x, Vaxcyte trades at a considerable discount to its peers and the broader industry. This suggests many investors are cautious about its near-term prospects. If the market reconsiders Vaxcyte’s growth trajectory or successful commercialization, its valuation could shift closer to the industry levels over time.

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

Result: Price-to-Book of 1.9x (UNDERVALUED)

However, investors should note that a lack of revenue and ongoing losses remain headwinds. These factors could challenge any sustained recovery in Vaxcyte’s valuation.

Find out about the key risks to this Vaxcyte narrative.

Build Your Own Vaxcyte Narrative

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A great starting point for your Vaxcyte research is our analysis highlighting 1 key reward and 2 important warning signs 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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