Exelixis (EXEL): Has the Recent Share Price Surge Closed the Valuation Gap?
Exelixis (EXEL) has quietly turned into one of those stocks that reward patient holders, with shares up around 33% over the past year and gains accelerating over the past 3 years.
See our latest analysis for Exelixis.
That strength is not a one week wonder, with a 7 day share price return of 8.37% and a one year total shareholder return of 33.07% backing up a powerful three year total shareholder return of 179.85%. This suggests momentum is still building rather than fading at a latest share price of $44.3.
If Exelixis has you rethinking what is possible in healthcare, it could be worth exploring other potential winners across healthcare stocks to see what else fits your strategy.
With profits growing faster than revenue and the share price now hovering just below analyst targets, the key question is whether Exelixis still trades at a discount or if the market already reflects its future growth.
Most Popular Narrative Narrative: 1.6% Undervalued
With Exelixis last closing at $44.30 against a narrative fair value of $45, the story leans slightly positive and hinges on future earnings power.
The company's substantial free cash flow, strong balance sheet, and disciplined capital allocation (including aggressive share repurchases and prioritization of high probability, high value R&D programs) position Exelixis to invest in next generation discovery and strategic partnerships, which has the potential to improve operating leverage and net margins over time as the product portfolio scales.
Want to see what powers that near term upside? The narrative leans on ambitious revenue expansion, rising margins, and a leaner share count. Curious how those pieces fit together?
Result: Fair Value of $45 (UNDERVALUED)
Have a read of the narrative in full and understand what's behind the forecasts.
However, margin pressure from discounted 340B sales and Exelixis heavy reliance on Cabometyx mean pricing or patent shocks could quickly derail that upside.
Find out about the key risks to this Exelixis narrative.
Build Your Own Exelixis Narrative
If this angle does not quite resonate, or you would rather follow your own instincts and numbers, you can build a personalized view in just a few minutes: Do it your way
A great starting point for your Exelixis research is our analysis highlighting 4 key rewards and 1 important warning sign 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.
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