Pharvaris (PHVS): Reassessing Valuation After Analyst Upgrades and Shifting Market Sentiment

Pharvaris (NasdaqGS:PHVS) has landed on investors’ radar after Bank of America raised its rating from underperform to neutral. This move, along with other analyst activity, is stirring up conversation around the stock’s future prospects.

See our latest analysis for Pharvaris.

After a year marked by steady advances in treatments and increased institutional interest, Pharvaris has delivered an 18.6% year-to-date share price return and a 6.9% total shareholder return over the past twelve months. The three-year total return stands out at nearly 374%. Recent conference presentations and a string of analyst upgrades suggest momentum could be building, with short-term price dips doing little to dampen the company’s longer-term growth story.

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With analysts raising targets and institutions accumulating shares, investors are left asking whether Pharvaris remains undervalued or if the optimism is already reflected in today’s price. This situation makes future upside less certain.

Price-to-Book Ratio of 7.4x: Is it justified?

Pharvaris trades at a price-to-book ratio of 7.4x, which is well above both its peer group average and the broader industry. At the last close price of $21.98, this high multiple suggests investors are paying a premium for growth expectations.

The price-to-book ratio compares a company’s market value to its book value. It is a common valuation tool for firms with modest or negative earnings, such as those in biotech. In this context, a higher ratio typically reflects anticipation of future revenue breakthroughs, but also means elevated expectations are already included in the share price.

Pharvaris stands out as expensive on this metric, with its 7.4x price-to-book ratio significantly above the peer group average of 4.7x and the US Pharmaceuticals industry average of just 2.3x. This high valuation could see the market adjust if the company’s future financial results do not align with investor optimism.

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

Result: Price-to-Book Ratio of 7.4x (OVERVALUED)

However, steep revenue growth expectations, combined with ongoing net losses, mean any clinical or regulatory setbacks could accelerate a sharp reversal in sentiment.

Find out about the key risks to this Pharvaris narrative.

Another View: SWS DCF Model Paints a Harsher Picture

Looking at Pharvaris through the lens of the SWS DCF model, a different story unfolds. The current share price of $21.98 is considerably higher than our estimated fair value of $6.99. This suggests there could be significant downside risk if growth expectations are not met. Which approach captures reality more accurately?

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 Pharvaris 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 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 Pharvaris Narrative

You might see things differently or prefer to dive into the numbers firsthand. It only takes a few minutes to build your own view. Do it your way

A great starting point for your Pharvaris research is our analysis highlighting 1 key reward and 3 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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