Why Celcuity (CELC) is on investors’ radar

Celcuity (CELC), a clinical stage oncology company licensing its lead drug candidate Gedatolisib from Pfizer, is drawing attention as investors reassess the stock after recent share price moves.

At a share price of $132.88, Celcuity’s 1 month share price return of 5.75% and 3 month share price return of 22.7% sit alongside a very large 1 year total shareholder return. This suggests that momentum has been building as investors reassess the risk and potential around its pipeline.

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With Celcuity now trading at $132.88 and sitting at a discount to the average analyst price target, the key question is whether investors are still underestimating its prospects or if the market is already accounting for its growth story.

Most Popular Narrative: 13.9% Overvalued

Celcuity’s most followed narrative arrives at a fair value of $116.70, which sits below the last close of $132.88 and frames the current optimism in the stock.

In order for you to agree with the analysts, you would need to believe that by 2029, revenues will be $607.1 million, earnings will be $152.4 million, and the stock would be trading on a PE ratio of 53.4x, assuming a discount rate of 7.2%.

Want to see what is baked into that valuation gap? The narrative leans heavily on rapid revenue build, rising margins and a premium future earnings multiple.

Result: Fair Value of $116.70 (OVERVALUED)

However, there is still execution risk, with ongoing net losses of US$192.9m and dependence on regulatory approvals that could be delayed or come with extra data demands.

Another View: SWS DCF Signals Deep Undervaluation

The popular narrative pegs fair value at $116.70 and calls Celcuity overvalued, yet the SWS DCF model tells a very different story. In that framework, the stock trading at $132.88 sits about 84% below an estimated future cash flow value of $823.53. Which picture do you put more weight on?

For a closer look at how those long range cash flows translate into that big gap between price and value, 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 Celcuity 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 46 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

Feeling the tension between the bullish and cautious views here? Use the data to pressure test your own thesis and weigh up the 3 key rewards and 2 important warning signs.

Looking for more investment ideas?

If Celcuity has sharpened your thinking, do not stop here. Broadening your watchlist now can help you spot opportunities others overlook.

• Hunt for quality at a discount by scanning 46 high quality undervalued stocks that pair stronger fundamentals with prices that may not fully reflect them yet.
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• Spot potential standouts early by checking the screener containing 22 high quality undiscovered gems before they attract wider market attention.

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.