Viking Therapeutics (VKTX): Assessing Valuation After 36% Monthly Share Price Gain

Viking Therapeutics (VKTX) stock has attracted attention as investors weigh its recent performance and future potential. The company’s shares have seen shifts in the past month, prompting questions about what could drive returns from this point forward.

See our latest analysis for Viking Therapeutics.

Viking Therapeutics has seen an impressive 1-month share price return of nearly 36%, catching fresh interest after earlier weakness this year. While the total shareholder return over the past 12 months remains deep in the red, momentum is showing signs of a rebound as investors weigh possible growth catalysts and the company’s long-term track record.

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That leaves investors at a crossroads, wondering if Viking’s recent surge signals a bargain waiting to be seized, or if the market has already priced in every ounce of expected growth from this point forward.

Price-to-Book Ratio of 4.8x: Is it justified?

Viking Therapeutics currently trades at a price-to-book (P/B) ratio of 4.8x, which is notably below the peer average of 9.3x. This suggests the market is assigning a lower valuation to the company's assets relative to its direct peers. At last close of $33.92, this could indicate that shares are cheaper compared to similar companies on a book-value basis.

The price-to-book ratio is commonly used to evaluate biotech companies like Viking Therapeutics that may not yet be profitable but still hold significant asset value from intellectual property and pipeline assets. A lower P/B ratio can sometimes signal undervaluation, especially if investors believe the company’s future prospects are being overlooked by the market.

However, when compared to the broader US Biotechs industry, which averages a P/B ratio of just 2.5x, Viking Therapeutics appears expensive, trading at almost double the sector average. This shows that while the company looks cheap versus its closest peers, it is priced at a premium compared with the industry as a whole. There is also insufficient data available to determine what the company’s fair P/B ratio should be, so investors may want to dig deeper to see whether the current multiple is sustainable as the market evolves.

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

Result: Price-to-Book of 4.8x (ABOUT RIGHT)

However, risks remain, including Viking’s ongoing lack of revenue and persistent net losses. These factors may test investor confidence if cash burn continues.

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

Build Your Own Viking Therapeutics Narrative

If you’d rather reach your own conclusions or want to dive deeper into the numbers, you can easily build a personalized narrative in just a few minutes, and Do it your way.

A great starting point for your Viking Therapeutics research is our analysis highlighting 3 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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