A Fresh Look at Viking Therapeutics (VKTX) Valuation After Recent Share Price Momentum

Viking Therapeutics (VKTX) has been a point of interest for investors lately, thanks to its unusual swings in stock performance over the past month. The company’s shares are up about 11% in that timeframe.

See our latest analysis for Viking Therapeutics.

Viking Therapeutics’ share price has shown signs of renewed momentum, gaining over 11% in the past month after a choppy start to the year. While the 1-year total shareholder return still sits deep in the red at -21%, the three- and five-year total returns of 878% and 520% respectively highlight just how much long-term value has been created for early investors, even as short-term sentiment has been volatile lately.

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With shares climbing, yet still far from analyst price targets, investors are left to wonder if Viking Therapeutics is currently trading at a bargain or if the market has already factored in growth prospects ahead.

Price-to-Book Ratio of 6.2x: Is it Justified?

Viking Therapeutics currently trades at a price-to-book (P/B) ratio of 6.2x, which offers an initial hint at how investors are appraising its assets compared to other biotech peers. Unlike earnings-focused metrics, the P/B ratio highlights the market’s confidence in the company’s current book value, a common approach when companies are unprofitable or lack meaningful revenue.

This valuation multiple signals that investors are paying a premium above the company’s net assets. Viking’s unprofitable status and zero revenue call typical valuation logic into question. Enthusiasm for future drug development or expected clinical breakthroughs may be fueling this elevated multiple, indicating the market is willing to pay up for long-shot potential rather than proven financials.

Stacking Viking’s P/B ratio against its industry, the company sits well above the US Biotechs average of 2.5x, which flags Viking as significantly more expensive by this standard. However, compared to the average of its peer group (8.1x), Viking shows relative value. There is insufficient data for a SWS Fair Ratio calculation that would offer an independent target multiple for further context.

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

Result: Price-to-Book Ratio of 6.2x (OVERVALUED)

However, with no revenue and ongoing net losses, any clinical setbacks or shifts in biotech sentiment could quickly change Viking’s outlook.

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

Build Your Own Viking Therapeutics Narrative

If this analysis doesn’t align with your perspective, or you have your own approach to research, you can craft your personal view in just a few minutes. Why not Do it your way?

A great starting point for your Viking Therapeutics research is our analysis highlighting 5 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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