WEBULL

IDEAYA Biosciences (IDYA): Valuation Check After Key Darovasertib Trial Milestone and Pipeline Progress

Simply Wall St · 1d ago

IDEAYA Biosciences (IDYA) just hit a key clinical milestone, completing enrollment in its pivotal OptimUM-02 trial of darovasertib for metastatic uveal melanoma, with additional IND clearances quietly broadening the pipeline behind that lead asset.

See our latest analysis for IDEAYA Biosciences.

The clinical momentum around darovasertib and fresh IND wins has helped IDEAYA build a strong backdrop, with a roughly 36 percent 3 month share price return and a standout 5 year total shareholder return of about 148 percent, even as the stock has eased slightly in the very near term.

If this kind of targeted oncology story interests you, it can be worth exploring other innovative names in healthcare stocks to see what else fits your strategy.

With shares up strongly over the past year but still trading at nearly a 50 percent discount to consensus targets, are investors underestimating IDEAYA's late stage pipeline, or is the market already baking in that future growth?

Price to Sales of 13.6x: Is it justified?

IDEAYA's last close at 33.37 dollars implies a rich valuation on revenue, with its double digit price to sales ratio signaling optimistic growth expectations versus peers.

The price to sales multiple compares the market value of the company to the revenue it generates. It is a common yardstick for pre profitability biotech names where earnings are still negative.

For IDEAYA, a 13.6 times price to sales ratio suggests investors are willing to pay a premium for its late stage precision oncology pipeline, even though the business remains loss making and is not forecast to reach profitability over the next three years.

The premium is stark, with IDEAYA trading above both the broader US biotech industry at around 12 times sales and a much lower estimated fair price to sales ratio of 1.3 times. This is a level the market could move toward if expectations reset.

Explore the SWS fair ratio for IDEAYA Biosciences

Result: Price to Sales of 13.6x (OVERVALUED)

However, clinical setbacks or slower than expected uptake for darovasertib and other pipeline assets could quickly challenge the premium valuation now embedded in IDEAYA's shares.

Find out about the key risks to this IDEAYA Biosciences narrative.

Build Your Own IDEAYA Biosciences Narrative

If you see the story differently or simply want to dig into the numbers yourself, you can quickly build a personalized view in minutes: Do it your way.

A great starting point for your IDEAYA Biosciences 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.