Is Indivior (INDV) Still Attractive After A 197% One Year Share Price Surge

• If you are wondering whether Indivior at around US$35.89 still offers value after a strong run, this article will walk through what the current price might be implying about the company.
• The stock has delivered a 196.9% return over the last year and a 414.6% return over five years, although the last 30 days saw a 1.9% decline and the last week was flat.
• Investors have been reacting to ongoing news flow around the company and its position in the pharmaceutical and biotech space, which continues to influence sentiment toward the stock. These headlines provide useful context for understanding why the share price has moved so strongly over multi year periods, yet can still be volatile month to month.
• Indivior currently has a valuation score of 2 out of 6, so we will look at what that means across different valuation methods. We will then finish by considering a broader way to think about what the market might be getting right or wrong on the stock.

Indivior scores just 2/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.

Approach 1: Indivior Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow model takes the cash that a company is expected to generate in the future, then discounts those projections back to a single value today. It is essentially asking what all those future cash flows are worth in present dollar terms.

For Indivior, the model used is a 2 Stage Free Cash Flow to Equity approach. The company’s latest twelve month free cash flow is about $132.3 million. Analysts provide explicit free cash flow estimates out to 2030, and Simply Wall St extrapolates beyond the standard five year analyst horizon to complete the 10 year path. For example, projected free cash flow in 2030 is $560.5 million, with discounted values provided for each year between 2026 and 2035.

Pulling these discounted cash flows together gives an estimated intrinsic value of about $107.93 per share. Compared with the current share price of around $35.89, this DCF output suggests the stock is 66.7% undervalued.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Indivior is undervalued by 66.7%. Track this in your watchlist or portfolio, or discover 885 more undervalued stocks based on cash flows.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Indivior.

Approach 2: Indivior Price vs Earnings

P/E is a useful yardstick for profitable companies because it links what you pay for the stock to the earnings the business is already generating. It helps you see how many dollars investors are currently willing to pay for each dollar of earnings.

In general, higher growth expectations and lower perceived risk can support a higher P/E, while slower growth or higher risk tend to justify a lower P/E. So the question is not whether a P/E is high or low in isolation, but whether it fits the company’s specific profile.

Indivior currently trades on a P/E of 36.14x, compared with the Pharmaceuticals industry average of 19.64x and a peer group average of 35.33x. Simply Wall St also calculates a proprietary “Fair Ratio” of 28.21x for Indivior. This is designed to reflect what might be a more tailored multiple by considering factors such as earnings growth, profit margins, industry, market cap and identified risks, rather than just lining it up against broad sector or peer averages.

Comparing the current P/E of 36.14x with the Fair Ratio of 28.21x suggests the shares are trading above that tailored benchmark.

Result: OVERVALUED

P/E ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1450 companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Indivior Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives. Narratives let you attach a clear story about Indivior to the numbers you are using for fair value, future revenue, earnings and margins.

A Narrative is simply your view of what is going on at the company, linked directly to a financial forecast and then to a fair value estimate. This means you are not just looking at ratios in isolation, but at a joined-up story and model.

On Simply Wall St, Narratives sit inside the Community page and are designed to be easy to use. Millions of investors can quickly see how a change in assumptions or new information such as news or earnings updates can adjust the fair value and whether that now sits above or below the current share price.

For Indivior, one investor might build a Narrative with a higher fair value based on stronger long term revenue and margin assumptions. Another might use more conservative inputs and arrive at a lower fair value. Both can then compare their figure to the current US$35.89 price to decide what action, if any, makes sense for them.

Do you think there's more to the story for Indivior? Head over to our Community to see what others are saying!

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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