Alkermes (ALKS) reported second quarter 2026 results on July 28, with revenue of US$496.01 million and net income of US$0.501 million, following a period of strong share price performance.

At a share price of US$52.73, Alkermes has given investors a 90 day share price return of 54.45% and a year to date share price return of 86.59%, while the 1 year total shareholder return is 101.64%. This points to strong momentum over the past year despite a softer 30 day share price return.

If Alkermes’s recent move has you thinking about what else is working in healthcare, it might be worth scanning other potential opportunities through the 41 healthcare AI stocks

After Alkermes’s strong run and the latest earnings surprise, the stock now sits close to analyst targets yet still screens at a sizeable estimated discount to intrinsic value. Does that balance of risk and reward still look attractive?

Most Popular Narrative: 11% Overvalued

The most widely followed narrative puts Alkermes’ fair value at $47.69, which sits below the latest close at $52.73. It frames the recent move as slightly ahead of that estimate while still hinging heavily on the orexin franchise and sleep disorders data.

Results from the Vibrance 1 Phase II study and the expanding orexin agonist pipeline de-risk the company's long-term R&D strategy, opening avenues to additional addressable disorders beyond narcolepsy and highlighting potential for future multi-indication revenue streams pending successful late-stage trials and commercialization.

Want to understand why this narrative supports a higher required return yet still lands above $45 per share? The story leans on double digit top line assumptions, rising profitability and a premium earnings multiple that sits well above the broader biotech group. Curious which revenue mix, margin path and earnings profile are doing the heavy lifting in that model? The full narrative lays out the numbers and the trade offs that sit behind this fair value call.

Result: Fair Value of $47.69 (OVERVALUED)

However, Alkermes still faces meaningful risks, including heavier R&D spending on the orexin program and its reliance on a concentrated set of proprietary products.

Another View on Alkermes Valuation

While analyst targets imply Alkermes trades about 11% above a US$47.69 fair value, the Simply Wall St DCF model points in the opposite direction. On that approach, Alkermes at US$52.73 screens around 48% below an estimated future cash flow value of US$101.47. Which framework do you trust more?

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Alkermes 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 51 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

Mixed signals in Alkermes can be useful if you dig into the numbers yourself and move quickly while opinions are still forming. To see both sides of the story in one place, take a closer look at the 2 key rewards and 2 important warning signs

Looking for more investment ideas beyond Alkermes?

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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.