Why Amylyx Pharmaceuticals (AMLX) Is Back In The Spotlight

Amylyx Pharmaceuticals (AMLX) has secured long-term manufacturing arrangements for its avexitide drug substance through a new agreement with Bachem Americas and a term sheet with Polypeptide Group.

Amylyx Pharmaceuticals has experienced a sharp swing in sentiment, with the share price up 181.00% year to date and the 1-year total shareholder return at 171.03%. However, short-term momentum has cooled, with a 7-day share price return showing a 5.51% decline and a 1-day move of 0.96% lower from the latest close at $32.09.

Scan Amylyx Pharmaceuticals alongside other late-stage biotech stories by checking our curated list of 18 high quality undiscovered gems that have strong fundamentals but limited market attention so far.

Amylyx Pharmaceuticals has gone from under the radar to a US$3.1b biotech on the back of avexitide and new manufacturing deals. After a 171% 1-year return, does the current valuation still favor buyers?

Most Popular Narrative: 25.6% Overvalued

At a last close of $32.09 against a narrative fair value of $25.56, Amylyx Pharmaceuticals is framed as ahead of that central valuation, with the story hinging on one core clinical readout and its ripple effects on future cash flows.

The company is targeting post bariatric hypoglycemia, a condition with no FDA approved therapies and an estimated 160,000 patients in the U.S., which creates room for a first approved product like avexitide to establish a new revenue line if pricing and access are secured.

Read the complete narrative.

Want to see what revenue curve this narrative is building in for Amylyx Pharmaceuticals? The projections tie that rare disease launch to steep sales growth, rising margins and a rich earnings multiple that many investors would usually associate with much larger pharma players.

Result: Fair Value of $25.56 (OVERVALUED)

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

Still, Amylyx Pharmaceuticals faces a single trial hinge in LUCIDITY and meaningful execution risk if post bariatric hypoglycemia diagnosis, access and adoption trend below expectations.

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

Another View on Amylyx Pharmaceuticals Valuation

While the analyst narrative frames Amylyx Pharmaceuticals as 25.6% overvalued at $32.09 versus a $25.56 fair value, the SWS DCF model points in the opposite direction. On that cash flow view, AMLX is priced at a steep discount, with the shares trading 84.1% below a DCF estimate of $201.25.

Two methods, two very different answers, which raises the key question for you as an investor: Do you trust the near term earnings story or the long run cash flow path implied by the DCF model?

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 Amylyx 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 33 high quality undervalued stocks. If you save a screener we even alert you when new companies match – so you never miss a potential opportunity.

Next Steps

Seen enough contrasting signals around Amylyx Pharmaceuticals to feel both interested and cautious at the same time? Move quickly through the latest numbers, risks and upside drivers so you can test your own thesis against the 2 key rewards and 4 important warning signs.

Looking for more ideas beyond Amylyx Pharmaceuticals?

If the conflicting signals around Amylyx Pharmaceuticals have your attention, do not stop here. Broaden your watchlist with a few focused stock ideas that fit clear, measurable criteria.

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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