H.C. Wainwright maintained a Buy rating on Roivant Sciences (NASDAQ:ROIV), with a consistent price target of $18.00. The firm's endorsement is grounded on a valuation model projecting a 6x multiple on the anticipated risk-adjusted revenues of $4.2 billion for Roivant by 2035, which is then discounted to present value.
The analyst's confidence in Roivant's portfolio is reflected in the probability of success (PoS) assigned to various treatments. Tapinarof for psoriasis received a 100% PoS due to its recent approval, and a 95% PoS for atopic dermatitis (AD) following encouraging Phase 3 results.
IMVT-1401, a treatment in development for myasthenia gravis (MG), was given a 75% PoS based on positive Phase 2 outcomes, which also supported a favorable outlook for its efficacy in other conditions such as warm autoimmune hemolytic anemia (wAIHA), thyroid eye disease (TED), chronic inflammatory demyelinating polyneuropathy (CIDP), and Graves’ Disease.
Furthermore, the firm ascribed a 55% PoS to brepocitinib for dermatomyositis and a 30% PoS for namilumab in treating sarcoidosis. The inclusion of other assets in Roivant's valuation is contingent upon further clarity on their development trajectories.
The analyst also noted risks associated with Roivant Sciences' journey, including regulatory and clinical hurdles, as some key products have not yet received approval. Additionally, the commercial risk is highlighted by the competitive nature of the markets Roivant is entering, where established companies with more robust commercial capabilities are present.
InvestingPro Insights
According to the latest data from InvestingPro, Roivant Sciences has a market capitalization of $8.87 billion and is trading at a price-to-earnings (P/E) ratio of 1.98, indicating a potentially undervalued stock compared to earnings. However, the adjusted P/E ratio for the last twelve months as of Q1 2025 stands at -132.94, reflecting market skepticism about future profitability. Despite this, the company's revenue growth has been impressive, with a 101.44% increase over the last twelve months and an even higher quarterly revenue growth of 154.96% in Q1 2025. These figures suggest a robust expansion in sales, which could be an indicator of the company's potential in the market.
Two notable InvestingPro Tips for Roivant Sciences highlight that the company holds more cash than debt on its balance sheet and has a high shareholder yield. This financial stability and return to shareholders may appeal to investors looking for a solid financial position and a company dedicated to maximizing shareholder value. For those interested in further analysis, additional InvestingPro Tips are available at: https://www.investing.com/pro/ROIV, providing more depth on the company's financial health and market performance.
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