Celldex Therapeutics stock snapshot

Celldex Therapeutics (CLDX) has drawn investor attention after recent gains, with the share price at $34.25 and total return figures of 10.8% over the past month and 30.9% over the past 3 months.

Short term momentum has been firm, with a 30 day share price return of 10.8% and a 90 day gain of 30.9%, while the 1 year total shareholder return of 76.6% reflects a strong recent run compared with its longer term record.

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With Celldex posting a 76.6% 1 year total return, annual revenue of just $1.545 million and an intrinsic value estimate that implies a 57.1% discount, you have to ask: is this a genuine opportunity or is the market already pricing in future growth?

Preferred Price to Book of 5.1x: Is it justified?

On a P/B of 5.1x, Celldex Therapeutics looks cheaper than its immediate peer group on this metric, yet more expensive than the broader US biotech industry.

P/B compares a company’s market value to the book value of its net assets, which can be a useful cross check for asset backed or early stage businesses where earnings are still negative. For a development stage biopharma like Celldex, it often reflects what the market is willing to pay today for the current cash, R&D assets and pipeline potential rather than current profits.

Here, Celldex’s 5.1x P/B sits below a peer average of 7.7x. This suggests investors are paying less per dollar of book value than for some similar names. At the same time, that 5.1x multiple is above the broader US biotech industry average of 2.5x. This indicates the market is still assigning a premium to Celldex’s balance sheet and pipeline relative to many smaller biotech names, even as the company remains unprofitable.

Result: Price to book ratio of 5.1x (ABOUT RIGHT)

However, there are clear risks to keep in mind, including Celldex’s US$258.757 million loss and the execution challenge involved in advancing a largely early stage antibody pipeline.

Another View: What the DCF Model Suggests

The P/B comparison paints Celldex as roughly in line with peers, yet our DCF model points in a different direction. With an estimated fair value of $79.92 per share compared with a $34.25 price, the SWS DCF model suggests the stock could be materially undervalued. Which signal do you trust more?

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Celldex Therapeutics 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 58 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

The mix of strong recent returns and early stage risks can feel conflicting, so it makes sense to review the details yourself and decide where you stand, starting with the 2 key rewards and 3 important warning signs

Looking for more investment ideas?

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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.