Assessing Avadel Pharmaceuticals (AVDL) Valuation As Shares Hover Near US$21 After Strong One Year Return

Avadel Pharmaceuticals (AVDL) has drawn investor attention after recent trading left the shares around $21.64, prompting fresh interest in how its narcolepsy focused portfolio and current fundamentals line up for long term holders.

See our latest analysis for Avadel Pharmaceuticals.

While the recent 1 day share price return of around 0.05% at US$21.64 and a 30 day share price return of 0.65% suggest only modest short term movement, the 1 year total shareholder return of 151.34% points to strong momentum building over a longer horizon as investors reassess Avadel Pharmaceuticals’ narcolepsy focused opportunity and risk profile.

If this narcolepsy story has you thinking about where else healthcare and AI are intersecting, it could be worth checking out our screener of 24 healthcare AI stocks as a starting point for other ideas.

With Avadel trading around US$21.64, just above its analyst price target and yet flagged with a sizeable intrinsic discount, the real question is whether the stock still offers upside or if the market is already pricing in future growth.

Most Popular Narrative: 3% Overvalued

With Avadel closing at $21.64 against a narrative fair value of about $20.94, the most followed view suggests the price sits slightly ahead of its modeled worth, built on detailed assumptions about LUMRYZ, future margins and long term growth.

LUMRYZ’s strong year-over-year growth in both patient count and net revenue, driven by robust adoption and prescriber expansion, signifies effective capitalization on the increasing prevalence and awareness of sleep disorders amid an aging population, pointing to continued substantial revenue and earnings upside as this trend accelerates.

Read the complete narrative.

Curious what growth path sits behind that fair value, and how fast revenues, earnings and margins are projected to ramp? The full narrative spells out the assumptions in plain numbers, including how long LUMRYZ is modeled to carry the story and what kind of earnings multiple could justify today’s price.

Result: Fair Value of $20.94 (OVERVALUED)

Have a read of the narrative in full and understand what’s behind the forecasts.

However, this fair value story still hinges on LUMRYZ remaining the core growth engine and on acquisition proposals closing as planned, with any setback or competing therapy quickly changing the risk return balance.

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

Another Way of Looking at Value

That fair value of about $20.94 paints Avadel as slightly overvalued, but our DCF model tells a very different story, with a future cash flow value of $37.97 per share and a 43% intrinsic discount. When two models disagree this much, it can be difficult to decide which one to rely on when evaluating an investment.

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 Avadel 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 55 high quality undervalued stocks. If you save a screener we even alert you when new companies match – so you never miss a potential opportunity.

Build Your Own Avadel Pharmaceuticals Narrative

If you see the data differently or simply want to stress test your own assumptions, you can create a custom thesis in just a few minutes, starting with Do it your way.

A great starting point for your Avadel Pharmaceuticals research is our analysis highlighting 2 key rewards and 1 important warning sign that could impact your investment decision.

Looking for more investment ideas?

Once you have a view on Avadel, do not stop there. Widening your watchlist can sharpen your decision making and reveal opportunities you might otherwise overlook.

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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