A Look At Crinetics Pharmaceuticals (CRNX) Valuation After Goldman Sachs Upgrade And Palsonify Atumelnant Progress

Crinetics Pharmaceuticals (CRNX) has been in focus after a Goldman Sachs analyst upgrade that followed positive Phase 2 data for atumelnant in congenital adrenal hyperplasia and encouraging early revenue from newly launched Palsonify.

See our latest analysis for Crinetics Pharmaceuticals.

The latest move in Crinetics shares, which closed at US$56.43, comes after a string of updates including the Palsonify launch, positive atumelnant data, and a US$350.1m follow on equity raise. The 30 day share price return of 16.1% and 90 day share price return of 35.8% point to building momentum. The 1 year total shareholder return of 54.7% and 5 year total shareholder return of about 2.8x highlight how longer term holders have been rewarded during this period.

If Palsonify and atumelnant have caught your attention, it could be a good moment to look more broadly at other healthcare stocks that are drawing interest from the market.

With shares up strongly over the past year and the stock trading below the average analyst price target, the key question now is whether Crinetics is still undervalued or whether the market is already pricing in future growth.

Price-to-Book of 5.4x: Is it justified?

Crinetics currently trades on a P/B of 5.4x, which screens as attractive against its closest peers on this metric but looks expensive versus the broader US pharmaceuticals group.

P/B compares the company’s market value to its book value, so a higher ratio often reflects investor expectations for future value creation beyond the current balance sheet. For a clinical stage biotech with limited revenue and ongoing losses, a higher P/B can indicate that investors are placing weight on the development pipeline rather than present earnings.

According to the data, Crinetics is described as good value on P/B when lined up against a selected peer set, where the average is 8.5x. That suggests the market is assigning a lower multiple than to similar companies, even though the story still revolves around early stage revenue and a sizeable net loss of US$423.1m.

The picture changes when you widen the lens to the full US pharmaceuticals industry, where the average P/B is 2.6x. On that broader comparison, Crinetics trades at more than double the industry multiple. This points to investors paying a premium for its rare disease focus and pipeline rather than treating it like a typical pharma name.

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

Result: Price-to-book of 5.4x (ABOUT RIGHT)

However, the story can change quickly if key trials disappoint or Palsonify underwhelms commercially, particularly with revenue at US$1.535m and a net loss of US$423.097m.

Find out about the key risks to this Crinetics Pharmaceuticals narrative.

Another angle on value: DCF says the gap is huge

The SWS DCF model presents a very different picture. Crinetics is described as trading at about an 88.5% discount to an estimated fair value of US$491.04 per share, compared to the current price of US$56.43. That kind of gap can indicate either mispricing or very cautious market assumptions. Which side do you think has it right?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Crinetics Pharmaceuticals for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 865 undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match – so you never miss a potential opportunity.

Build Your Own Crinetics Pharmaceuticals Narrative

If you see the numbers differently or prefer to lean on your own research, you can pull the key data together and build a view in minutes, Do it your way.

A great starting point for your Crinetics Pharmaceuticals research is our analysis highlighting 2 key rewards and 2 important warning signs that could impact your investment decision.

Looking for more investment ideas?

If you are serious about building a stronger portfolio, do not stop at one stock; widen your watchlist with a few focused ideas that could sharpen your edge.

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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