Savara (SVRA): Assessing Valuation Following Wider Q3 and Nine-Month Net Losses

Savara (SVRA) just released its third quarter and nine-month earnings report, revealing a larger net loss compared to the same period last year. These results give investors new numbers to consider as they assess the company’s future outlook.

See our latest analysis for Savara.

While Savara’s earnings showed a wider net loss, investors appear focused on growth potential, as reflected in the stock’s strong momentum. The share price climbed 19.7% in the past month and is up 60.3% year-to-date, pushing its three-year total shareholder return to over 240%.

If Savara’s latest jump has you on the hunt for what’s next, broaden your search and discover fast growing stocks with high insider ownership

But with shares rallying so sharply ahead of fundamentals, the key question now is whether Savara is still trading at an attractive valuation, or if the market has already priced in all of its growth potential. Does a genuine buying opportunity remain?

Price-to-Book Ratio of 12.6x: Is it justified?

At the last close price of $4.92, Savara trades at a price-to-book (PB) ratio of 12.6x. This level is lower than the peer group average but much higher than the broader US Biotechs industry, creating a complex valuation picture for investors weighing potential upside against sector norms.

The price-to-book ratio measures how much investors are paying for each dollar of the company’s net assets. For early-stage biotechs like Savara, where profits can be elusive, PB can reflect intangible value expectations, such as pipeline potential or intellectual property.

Savara’s PB ratio of 12.6x stands below its direct peer average of 18x. However, it is significantly above the US Biotechs industry average of just 2.5x, which may signal that the market is pricing in strong growth potential, but also that investors are paying a steep price relative to most sector players. Without a fair ratio benchmark, it is unclear whether this level is sustainable or if the gap to the sector norm could eventually narrow.

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

Result: Price-to-Book Ratio of 12.6x (ABOUT RIGHT)

However, risks remain, including a lack of current revenue and the possibility that market enthusiasm is running ahead of the company’s fundamental progress.

Find out about the key risks to this Savara narrative.

Build Your Own Savara Narrative

If you want a different angle or like digging into the details yourself, you can easily craft your own Savara story in just a few minutes. 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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