Does Regeneron’s 8% Weekly Surge Signal a Shift After New FDA Drug Approval?

If you have found yourself wondering what to do with Regeneron Pharmaceuticals right now, you are not alone. This stock has managed to keep investors on their toes, with price movements that sometimes seem to defy convention. In just the last week, shares have popped up 8.0%, hinting at renewed optimism, while the 30-day window also shows modest gains. Step back to the past year, however, and things look much tougher, with the stock down over 40%. It is a pattern that reflects broader biotech volatility as well as changing risk appetites after recent industry news, such as regulatory momentum and fresh headlines around drug approvals rather than dramatic company-specific events.

Even with these swings, Regeneron’s underlying business has kept valuation watchers busy. According to our composite valuation score, which looks across six time-tested metrics, Regeneron is currently undervalued in every single one, scoring a full 6 out of 6. That is rare and signals that this is more than just a case of market nerves or a falling out of favor. It raises the tantalizing question: is the market sleeping on Regeneron’s long-term potential, or seeing something analysts are missing?

Let’s dig into the valuation specifics to see how Regeneron stacks up. Later, we will explore why a blend of analysis may be the best guide for your next move.

Why Regeneron Pharmaceuticals is lagging behind its peers

Approach 1: Regeneron Pharmaceuticals Discounted Cash Flow (DCF) Analysis

The Discounted Cash Flow (DCF) model estimates a company’s value by forecasting its future cash flows and discounting them back to today’s dollars. This approach provides a sense of what the business is worth based strictly on its expected ability to generate cash over time, regardless of short-term market sentiment.

Looking at Regeneron Pharmaceuticals, the current Free Cash Flow (FCF) stands at $3.40 Billion. Analyst projections expect FCF to grow and reach $6.02 Billion in 2029. Beyond the first five years, further cash flow figures are modeled by extrapolating growth trends, resulting in a projected FCF of over $8 Billion by 2035. All these projections are in US dollars and based on the 2 Stage Free Cash Flow to Equity model.

Applying the DCF method to these numbers, Regeneron’s estimated intrinsic value is $1,529 per share. Compared to the current share price, this suggests the stock is 60.8% undervalued.

Result: UNDERVALUED

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

Our Discounted Cash Flow (DCF) analysis suggests Regeneron Pharmaceuticals is undervalued by 60.8%. Track this in your watchlist or portfolio, or discover more undervalued stocks.

Approach 2: Regeneron Pharmaceuticals Price vs Earnings

The price-to-earnings (PE) ratio is widely used to value profitable companies like Regeneron Pharmaceuticals because it ties the stock price to the business’s ability to generate ongoing profits. Since Regeneron is consistently profitable, the PE ratio helps investors quickly gauge whether its shares look cheap or expensive relative to earnings.

Growth expectations and risk play a big role in determining what a “normal” or “fair” PE should be for a biotech stock. Higher expected profit growth or lower risks usually justify a higher PE ratio, while slower growth or elevated uncertainty lead to a lower one.

Currently, Regeneron's PE ratio stands at 14x, which is lower than the biotech industry average of 16.6x and well below the peer group average of 22.4x. This implies that the market is valuing Regeneron at a discount compared to its closest biotech peers.

Simply Wall St’s "Fair Ratio" introduces an additional layer of precision by calculating what PE ratio is justified for Regeneron based on its unique earnings growth prospects, profit margins, market cap, industry conditions, and company-specific risks. Unlike a simple industry average or a peer comparison, the Fair Ratio blends these factors to arrive at a benchmark that is specifically tailored for Regeneron. For this stock, the Fair Ratio is calculated as 24.4x.

With Regeneron’s actual PE ratio at 14x and its Fair Ratio at 24.4x, the shares are trading well below where you would expect based on both company-specific fundamentals and market context. This suggests a case of undervaluation in the current market.

Result: UNDERVALUED

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

Upgrade Your Decision Making: Choose your Regeneron Pharmaceuticals Narrative

Earlier, we mentioned that there is an even better way to understand valuation, so let’s introduce you to Narratives. A Narrative is a simple, approachable way for investors to create a story behind the numbers, connecting their personal expectations about a company’s future revenue, earnings, and margins to their own estimate of fair value.

With Narratives, you can move beyond raw metrics and industry averages by explicitly linking your perspective on Regeneron Pharmaceuticals’ business outlook to a forecast, which then leads to a fair value for the stock. This approach brings clarity by answering not just what a stock is worth, but why. It also helps you decide whether to buy or sell by directly comparing your Fair Value to the current Price.

Best of all, Narratives are easy to try and widely accessible on Simply Wall St’s Community page, where millions of investors post, review, and update their views as new news or earnings announcements roll in. Because Narratives update dynamically, you will always have a timely view grounded in the latest facts and market-moving events.

For Regeneron Pharmaceuticals, one investor’s narrative could be highly optimistic, seeing a Fair Value as high as $890 based on strong pipeline expansion and margin growth. Another may view it more cautiously, setting Fair Value at just $543 due to competitive and regulatory pressures.

Do you think there's more to the story for Regeneron Pharmaceuticals? Create your own Narrative to let the Community know!

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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