A Closer Look at Viking Therapeutics (VKTX) Valuation Following Recent Share Price Momentum

Viking Therapeutics (VKTX) has been under the radar recently, with shares drifting slightly over the past week. Interest in the biotech stock has picked up, however, as investors assess its recent performance and long-term potential.

See our latest analysis for Viking Therapeutics.

Despite a tough 12 months that saw Viking Therapeutics deliver a -34.85% total shareholder return, momentum has started to build again after a strong 90-day share price return of 32.5%. Investors now appear to be reassessing Viking’s long-term growth potential as excitement grows around the biotech industry’s next breakthroughs.

If Viking’s recent rally has you curious about what else might be gaining traction, now is a great time to broaden your search and discover fast growing stocks with high insider ownership

But after such a dramatic swing in fortunes, is Viking Therapeutics now trading at a discount compared to future expectations? Or is today’s share price already reflecting all the growth ahead?

Price-to-Book of 5.4x: Is it justified?

Viking Therapeutics currently trades at a price-to-book (P/B) ratio of 5.4x, which is well below the average of its peer group and comfortably above the US Biotechs industry average of 2.5x. With the last close price at $34.26, the company appears attractively valued against its direct peers based on this specific metric.

The price-to-book ratio compares a company's market value to its book value, offering a measure of whether shares are trading at a premium or discount to net assets. For biotech firms like Viking, with little to no revenue and negative profitability, book value is often used as a rough proxy for underlying worth since traditional earnings-based multiples may not apply.

Despite being good value relative to its immediate peer group, Viking's P/B multiple remains elevated when set against the wider industry. This suggests that while some are pricing in its growth prospects or pipeline, the broader market may be assigning less confidence to future earnings. There is no "fair ratio" benchmark available to further contextualize these levels, but the gap to industry norms is notable and could influence how the stock trades as sentiment shifts.

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

Result: Price-to-Book of 5.4x (ABOUT RIGHT)

However, significant risks remain, including ongoing negative net income and an industry-wide lack of consistent revenue. These factors could quickly temper current investor optimism.

Find out about the key risks to this Viking Therapeutics narrative.

Build Your Own Viking Therapeutics Narrative

If you see things differently or would like to dive deeper into the numbers yourself, you can build your own perspective quickly: Do it your way

A great starting point for your Viking Therapeutics research is our analysis highlighting 4 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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