Evaluating Regeneron After Recent Pipeline News and Sharp 13% Stock Surge

If you find yourself pausing over Regeneron Pharmaceuticals this week, you are definitely not alone. With the stock surging 13.0% in just the last seven days and up 16.1% over the past month, it is hard not to feel a bit of FOMO creeping in. But take a step back: over the past year, shares are actually down 29.1%, and still recovering from earlier slumps that pushed the year-to-date return to -8.5%. So, what is going on beneath the surface, and is this rebound a true turning point or just noise?

Recent news has revived optimism around Regeneron, especially developments in its flagship treatments and pipeline progress for age-related macular degeneration, among others. These updates have clearly caught the market’s attention, shifting the conversation from risk aversion to renewed interest in the company’s prospects. Still, the stock’s dramatic swings, both up and down, have many investors wondering if the market is really valuing the company accurately or if there are opportunities being overlooked.

For anyone weighing their next move, a good place to start is with Regeneron’s value score. Right now, the company notches a 5 out of 6 on our undervaluation checks, a strong signal that the current price may not reflect the full story. Over the next section, we will break down the main tools investors use to judge valuation, then dig even deeper into what those numbers actually mean for your decision-making.

Why Regeneron Pharmaceuticals is lagging behind its peers

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

A Discounted Cash Flow (DCF) model estimates a company's intrinsic value by projecting future free cash flows and discounting them back to today's dollars. This approach helps investors gauge what a business is truly worth, based on its capacity to generate cash in the years ahead.

Regeneron Pharmaceuticals is currently producing Free Cash Flow (FCF) of $3.4 Billion. Analysts have forecasted strong annual growth, with estimates reaching $6.2 Billion in FCF by 2029. Looking a full decade ahead, projections, both analytic and extrapolated, suggest FCF could rise above $8.2 Billion by 2035. All cash flows discussed here are in dollars, and reflect the latest multi-analyst estimates followed by Simply Wall St's own longer-term extrapolations.

Based on these cash flow projections and the 2 Stage Free Cash Flow to Equity DCF model, the intrinsic value per share comes out to $1,526.39. This figure implies that Regeneron's stock is trading at a substantial 57.1% discount to its estimated fair value, suggesting the price does not yet reflect the company's true earning power.

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 57.1%. 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 a trusted tool for evaluating profitable companies like Regeneron Pharmaceuticals. It reflects what investors are willing to pay today for a dollar of current earnings, making it especially useful when the company is generating consistent profits.

Growth expectations and risk play a big role in determining what is a “normal” or “fair” PE ratio. Companies with high growth potential or lower risk profiles typically command higher PE ratios, while slower-growing or riskier firms tend to trade at lower multiples.

Regeneron currently trades at a PE ratio of 15.2x. This is below both the Biotech industry average of 17.9x and the average among its peer group at 22.7x. While those benchmarks offer useful context, the Simply Wall St “Fair Ratio” is designed to be even more insightful. The Fair Ratio here is calculated at 24.6x, reflecting factors like Regeneron’s expected earnings growth, its robust profit margins, industry context, and its market size and risk profile. By integrating these company-specific details, the Fair Ratio moves beyond a one-size-fits-all peer or industry comparison.

With Regeneron’s current PE ratio notably below its Fair Ratio, the stock appears undervalued on this metric and this supports the case seen in the DCF analysis.

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 simply your story for a company: it is how you connect recent news, industry trends, and what you believe about Regeneron's future into concrete numbers like revenue, earnings, and profit margins. Together, these drive your own fair value estimate.

Unlike traditional ratios or models, Narratives link the company's story directly to a forward-looking financial forecast and then instantly translate that into a fair value. On Simply Wall St's Community page, millions of investors use Narratives as an easy, accessible tool. Just choose, tweak, or build your perspective and see how your thesis stacks up against the current market price.

This approach helps you decide when to buy, hold, or sell by putting your assumptions, and those of the crowd, side by side with today's price, so you can act confidently. Narratives are updated dynamically as new news, earnings, or product launches hit the wires, meaning your view automatically stays relevant.

For Regeneron Pharmaceuticals, one Narrative assumes aggressive adoption of its drug pipeline will lift its fair value to $890.0 per share, while another, more cautious view suggests a fair value as low as $543.0. This wide gap highlights how different investors’ stories lead to very different investment decisions.

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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