IDEAYA Biosciences (IDYA) shares are in focus after the company reported fourth quarter and full year 2025 results that showed smaller net losses and a lower loss per share versus the prior year.

At a share price of US$30.76, IDEAYA’s recent 1 day share price return of 1.62% contrasts with a 30 day share price return of a 14.17% decline. The 1 year total shareholder return of 50.49% and 3 year total shareholder return of 76.78% indicate that, despite recent weakness, longer term momentum has been stronger as investors weigh the reduced losses against ongoing clinical trial and partnership developments.

If this earnings update has you thinking about other opportunities in precision oncology and related fields, it could be a good moment to review 25 healthcare AI stocks as potential new ideas to research.

With IDEAYA still loss making but reporting smaller losses and trading at US$30.76, the real question is whether the recent pullback leaves upside on the table, or if the market already prices in its future growth potential.

Preferred Price-to-Sales of 12.3x: Is it justified?

IDEAYA is currently valued at a P/S of 12.3x, which sits above both peers and the wider US Biotechs industry, even with the shares at $30.76.

The P/S ratio compares the company’s market value to its revenue, which can be a common way to look at businesses that are still loss making, like many early stage biotech names. In this case, investors are effectively paying a higher price per dollar of current revenue while the company continues to work toward profitability.

Compared with the US Biotechs industry average P/S of 11.3x and a peer average of 5.5x, IDEAYA’s 12.3x multiple stands out as materially richer. It is also well above the estimated fair P/S ratio of 3.2x. Some investors may watch that level as a possible anchor if sentiment around the story changes.

Result: Price-to-Sales of 12.3x (OVERVALUED)

However, IDEAYA’s premium 12.3x P/S and ongoing net loss of US$113.698 million mean that any clinical or partnership setbacks could quickly challenge the current valuation.

Another View: DCF Implies Very Different Value

While the current 12.3x P/S suggests IDEAYA is expensive against peers and the US Biotechs industry, our DCF model points the other way. At a share price of $30.76 versus an estimated future cash flow value of $158.53, the stock screens as heavily undervalued, which raises the question of which signal you trust more.

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 56 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

Uncertain whether this mix of premium pricing and loss making results feels reasonable or stretched? Act while the numbers are fresh in your mind and weigh up 2 key rewards and 1 important warning sign to decide where you stand.

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.