Nektar Therapeutics (NKTR) recently reported 52-week Phase 2b REZOLVE-AA data for rezpegaldesleukin in severe alopecia areata, alongside US$699 million of fresh funding and plans to move the program into Phase 3 trials.

Nektar’s share price has swung sharply over the past year, with a 30 day share price return of 12.30% and a 90 day share price return of 126.81%, while the 1 year total shareholder return is very large, alongside fresh REZOLVE AA data, new funding and ongoing class action headlines.

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With Nektar’s share price up sharply over 90 days, a very large 1 year total return and fresh REZOLVE-AA data plus funding in hand, are you looking at an undervalued recovery story, or is the market already pricing in future growth?

Most Popular Narrative: 40.1% Undervalued

Analyst consensus fair value of $144.25 sits well above Nektar’s last close at $86.46. This puts a lot of weight on the core growth story behind rezpegaldesleukin.

Strong initial Phase IIb and ongoing data for REZPEG in atopic dermatitis, combined with a large and growing addressable market (expected to reach nearly $30B by 2033), position Nektar to access significant new revenue streams and improve long-term earnings as the population ages and chronic inflammatory diseases rise globally.

Curious what kind of revenue curve and margin shift analysts are building in to reach that higher fair value, including a very rich future earnings multiple and dilution assumptions that pull everything back into today’s price.

Result: Fair Value of $144.25 (UNDERVALUED)

However, this hinges on rezpegaldesleukin clearing late stage trials and funding staying accessible, with the company still posting a net loss of US$164.1 million.

Another Way To Look At Valuation

Analyst fair value at $144.25 paints Nektar as 40.1% undervalued, but the P/B ratio tells a very different story. At 32.5x book value versus 3.1x for peers and 2.7x for the broader US Pharmaceuticals group, the stock sits at a steep premium. Is the balance sheet really worth that much extra?

That sort of gap can point to optimism around future outcomes, but it also raises the risk that even small disappointments hit the share price hard. If you are weighing how stretched this looks next to peers, See what the numbers say about this price — find out in our valuation breakdown.

Next Steps

With such mixed signals around valuation, risk and potential reward, it makes sense to look at the numbers yourself and decide quickly where you stand. To weigh both sides in one place, review the 1 key reward and 4 important warning signs

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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.