Assessing Savara (SVRA) Valuation as Shares Rally 26% in the Past Month

Savara (SVRA) shares have climbed again, extending gains to more than 26% over the past month. Investors are watching closely and are eager for any signals that might explain the stock's steady momentum lately.

See our latest analysis for Savara.

Savara’s impressive 26% one-month share price return adds to a string of strong results, with momentum building further after a 40% gain in the past 90 days. Looking at the bigger picture, the company’s one-year total shareholder return of 33% climbs to over 225% for three years. This recent rally is the latest highlight in Savara’s ongoing resurgence.

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With shares surging and analyst price targets pointing even higher, the key question now is whether Savara’s rapid gains reflect true undervaluation or if the market has already priced in the company’s future potential. Could this be a timely buying opportunity?

Price-to-Book Ratio of 10.9x: Is it justified?

With Savara’s current price-to-book ratio at 10.9x and the last close at $4.26, the stock is priced well above the industry’s average. This raises questions about how much future optimism is already factored in.

The price-to-book (P/B) ratio compares a company's market value to its book value and serves as a common valuation tool for biotech firms with unpredictable earnings. This high ratio suggests investors expect significant growth or breakthrough developments ahead. It also points to a rich valuation in the present context.

Compared to the US Biotechs industry average of 2.6x, Savara trades at a hefty premium. The peer group’s average is even lower, highlighting just how much investor expectations are fueling Savara's stock price relative to tangible assets.

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

Result: Price-to-Book Ratio of 10.9x (OVERVALUED)

However, risks remain if growth slows or if competitive pressures intensify, which could quickly challenge the optimism reflected in Savara’s current valuation.

Find out about the key risks to this Savara narrative.

Build Your Own Savara Narrative

If you see things differently or want to dig deeper on your own, you can shape your own Savara story in just a few minutes with Do it your way.

A great starting point for your Savara 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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