Assessing Arrowhead Pharmaceuticals (ARWR) Valuation After Obesity Trial Progress And New REDEMPLO Approvals
Arrowhead Pharmaceuticals (ARWR) is in focus after early clinical data for its obesity candidates ARO-INHBE and ARO-ALK7, along with new approvals for REDEMPLO in Canada and China, highlighted progress across its RNAi pipeline.
See our latest analysis for Arrowhead Pharmaceuticals.
Despite the positive obesity data and fresh REDEMPLO approvals, Arrowhead’s 1-day share price return of a 7.23% decline and 30-day share price return of a 4.24% decline contrast with a sharp 90-day share price return of 82.17% and a very large 1-year total shareholder return of 232.61%. This suggests strong longer term momentum after recent volatility around its follow on equity and convertible note offerings.
If these RNAi updates have caught your attention, it could be a good moment to see what else is progressing in biotech and check out healthcare stocks as another potential hunting ground.
With Arrowhead’s shares up strongly over 90 days and trading at US$65.69 with an indicated intrinsic discount of about 45% and a value score of 4, should you see mispricing here or assume the market is already baking in future growth?
Most Popular Narrative: 2.5% Overvalued
The widely followed narrative sets a fair value of about US$64.08 per share, slightly below Arrowhead’s last close at US$65.69. This frames the current premium as modest rather than extreme.
Analysts have raised their price targets on Arrowhead Pharmaceuticals by roughly $6 to the mid $40s to low $60s range, citing the FDA approval of Redemplo, a strengthened commercial outlook in familial chylomicronemia syndrome and sHTG, and underappreciated long term cost and margin advantages.
Curious how a company with ongoing losses still earns a premium tag? The narrative leans heavily on revenue durability, margin expansion, and a rich future earnings multiple. Want to see exactly how those moving parts add up to this fair value?
Result: Fair Value of $64.08 (OVERVALUED)
Have a read of the narrative in full and understand what's behind the forecasts.
However, you still have to weigh the risk that key Phase 3 readouts or partner decisions disappoint, which could quickly affect both revenue expectations and sentiment.
Find out about the key risks to this Arrowhead Pharmaceuticals narrative.
Another View: SWS DCF Points to Undervaluation
That 2.5% premium to the US$64.08 fair value from the consensus narrative presents Arrowhead as slightly overvalued. Our DCF model arrives at a different result, with a fair value of US$120.37 per share, which is above the current US$65.69 price. This highlights a notable gap between the two valuation perspectives.
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 Arrowhead 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 884 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 Arrowhead Pharmaceuticals Narrative
If you are not fully aligned with this view or prefer to study the numbers firsthand, you can quickly build your own take in under three minutes. Start with Do it your way
A great starting point for your Arrowhead Pharmaceuticals research is our analysis highlighting 2 key rewards and 3 important warning signs 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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