IDEAYA Biosciences (IDYA) recently released its second quarter 2026 results, reporting revenue of US$8.86 million and a net loss of US$112.45 million. These figures, together with wider losses per share, are influencing how investors reassess the stock.

The latest earnings release appears to be a key reference point for IDEAYA Biosciences, with the 90 day share price return of 29.03% and 1 year total shareholder return of 47.64% signalling momentum that has built over time rather than just in recent sessions.

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The strong 12 month run in IDEAYA Biosciences, alongside widening losses, leaves a clear tension between growth expectations and current pricing. Does the risk reward still lean toward buyers, or has optimism already been fully reflected?

Preferred Price-to-Sales Multiple of 15.1x: Is it justified?

At a last close of $36.54, IDEAYA Biosciences is described as trading 40.3% below an internal fair value estimate based on future cash flows, yet its current P/S ratio of 15.1x is flagged as expensive relative to several benchmarks.

The P/S multiple compares the company’s market value to its revenue and is often used for unprofitable biotech stocks where earnings are not yet a guide. For IDEAYA Biosciences, a 15.1x P/S suggests investors are placing a high value on each dollar of current revenue, which ties in with forecasts that revenue could grow far faster than 20% per year and remain ahead of the broader US market growth expectations.

However, that 15.1x P/S is described as expensive compared to both an estimated fair P/S ratio of 4.3x and the US Biotechs industry average of 10.9x, as well as a peer average of 12.9x. The fair ratio implies a level that market pricing could move toward if expectations around growth or long term cash generation change. As a result, the current premium leaves little room for disappointment in those assumptions.

Result: Price-to-Sales of 15.1x (OVERVALUED)

However, IDEAYA Biosciences still carries meaningful risk if clinical trial results disappoint or if partnerships and licensing discussions fail to advance as anticipated.

Another view on IDEAYA Biosciences using our DCF model

The earlier P/S discussion presents IDEAYA Biosciences as expensive on sales, yet the SWS DCF model points in a different direction. At a share price of $36.54, the stock is described as trading below an estimated future cash flow value of $61.17, which implies undervaluation. How should an investor weigh a rich revenue multiple against a supportive cash flow view?

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out IDEAYA Biosciences 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 53 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

Given the mix of strong recent returns and ongoing losses at IDEAYA Biosciences, it makes sense to review the underlying data directly and decide how comfortable you are with both sides of the story. To help you weigh the downside and upside case more clearly, start with the 2 key rewards and 1 important warning sign.

Looking for more investment ideas beyond IDEAYA Biosciences?

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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.