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Viking Therapeutics (VKTX): Assessing an Expensive Valuation After a Recent Pullback in the Share Price

Simply Wall St · 2d ago

Viking Therapeutics (VKTX) has been drifting lower this month after a powerful run over the past year, and that pullback is exactly what has traders asking whether the story still holds up.

See our latest analysis for Viking Therapeutics.

That recent slide, including a 1 month share price return of minus 10.35 percent and a year to date share price return of minus 16.67 percent, comes after a huge three year total shareholder return of 334.28 percent. This suggests momentum is cooling as investors reassess near term risk versus long term drug development potential.

If this biotech swing has you reassessing your watchlist, it might be worth scanning other specialist names across healthcare stocks to spot fresh opportunities ahead of the next move.

With the share price now well below its highs but analyst targets still implying hefty upside, the key question is whether Viking’s pipeline is undervalued or if the market has already baked in most of the future growth.

Price to Book of 5.7 times, is it justified?

On a last close of $34.27, Viking trades at a price to book ratio that screens as expensive against much of the biotech space.

Price to book compares the company’s market value to its net assets, which matters for early stage biotechs where profits and revenue are still years away.

In Viking’s case, the 5.7 times price to book suggests investors are paying a premium for its clinical pipeline and management track record, even though the business is loss making and expected to remain unprofitable with no meaningful revenue in the near term.

That premium looks stretched when set against the broader US biotech industry’s 2.7 times average. It appears more reasonable, however, relative to a tighter peer group average of 6.7 times, implying Viking is richly valued versus the sector overall but not out of line with similar high expectation names.

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

Result: Price to book of 5.7 times (OVERVALUED)

However, setbacks in Viking’s clinical trials, or a sharp shift in appetite for high risk, loss making biotechs, could quickly cool sentiment.

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

Build Your Own Viking Therapeutics Narrative

If you see things differently or want to dig into the numbers yourself, you can build a personalised view of Viking in just a few minutes, 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.