Celldex Therapeutics (CLDX) recently closed a large underwritten public equity offering, raising about US$345 million soon after sharing new Phase 2 barzolvolimab data in multiple chronic urticaria indications at a major dermatology conference.

At a share price of US$31.35, Celldex has logged a 1 month share price return of 6.52% and a year to date share price return of 16.07%. The 1 year total shareholder return of 107.20% contrasts with a flat 3 year total shareholder return of about zero, which hints that momentum has been building more recently as fresh barzolvolimab data and the follow on equity offering refocus investor attention on execution risk and future growth potential.

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With new barzolvolimab data, a US$345 million equity raise, and a recent 1-year total shareholder return above 100%, the key question now is whether Celldex still trades at a discount or if the market is already pricing in potential future growth.

Preferred Price to Book Multiple of 4.6x: Is It Justified?

On Simply Wall St's numbers, Celldex screens as good value at a P/B of 4.6x against a peer average of 5.4x, even though the shares changed hands at $31.35 at the last close.

P/B compares the company’s market value with its net assets, which can be a useful cross check for pre revenue or loss making biotechs where earnings based multiples are less meaningful.

Here, the current P/B of 4.6x sits below the peer average of 5.4x. This suggests the market is assigning a lower equity value per dollar of book value than the broader peer group, even as Celldex remains unprofitable and carries losses of $258.76 million against only $1.55 million of reported revenue.

Compared with the wider US Biotechs industry average P/B of 2.2x, Celldex trades at more than double the sector level. This points to a richer valuation than many smaller biotech names even if it looks relatively inexpensive versus a tighter peer set.

Result: Price to book of 4.6x (ABOUT RIGHT)

However, the story still hinges on successful barzolvolimab trials and future funding options, with current losses of US$258.76 million against US$1.55 million of revenue.

Another View: What Our DCF Model Is Signaling

While the current P/B of 4.6x looks roughly in line with peers, Simply Wall St's DCF model paints a different picture, with an estimated future cash flow value of $83.88 per share versus a market price of $31.35. If both numbers are accurate, which one is closer to how you want to frame risk?

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 61 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

With sentiment clearly mixed between promise and risk, this is a moment to look at the numbers yourself and decide where you stand. To weigh both sides of the story, start with the 2 key rewards and 3 important warning signs.

Looking for more investment ideas?

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• Spot potential value opportunities early by scanning 61 high quality undervalued stocks that pair solid fundamentals with prices that may not fully reflect their qualities.
• Strengthen your income stream by focusing on 13 dividend fortresses offering yields from companies that prioritize consistent shareholder payouts.
• Sleep easier at night by concentrating on 70 resilient stocks with low risk scores that score well on resilience and balance sheet strength.

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.