Alvotech stock has rallied strongly over the past month, yet valuation checks still suggest the shares lean cheap on several measures. After a long period of weaker returns, investors now have to weigh this sharp rebound against what the broader valuation picture is signalling.

• The past month return of 57.4% points to a sharp re-rating that puts recent price action under closer scrutiny for anyone considering Alvotech today.
• Recent licensing deals and progress with key biosimilar filings can support expectations for future revenue, while ongoing losses and the need for external financing may limit how much value investors are willing to place on that pipeline.
• The high value score of 5 out of 6 suggests that, on the broader checks, Alvotech still screens as relatively inexpensive rather than fully priced in.

The issue now is whether the recent surge in Alvotech's share price already reflects the improving story, or if current levels still leave meaningful room before the valuation looks full.

Compare Alvotech's sharp re-rating with other undervalued opportunities by scanning the 46 high quality undervalued stocks that share solid fundamentals and the potential for a similar shift in market attention.

Does Alvotech Look Undervalued on Sales?

P/S is a useful way to look at Alvotech because the company is still loss making and investors are mainly paying for its revenue base and pipeline.

Alvotech trades on a P/S of 3.5x, which is well below the Biotechs industry average of 12.9x and also below the peer group average of 17.0x. The tailored fair multiple for Alvotech, which adjusts for its size, margins, sector and risks, is estimated at 5.1x. That is higher than where the stock trades today, so the current P/S still points to a discount against what this framework suggests could be reasonable.

Because recent licensing deals and financing activity have lifted attention on Alvotech without pushing the P/S anywhere near industry or peer levels, the market is still pricing the stock at a lower revenue multiple than many comparable biotechs.

On the P/S multiple, Alvotech stock still appears undervalued relative to both its tailored fair ratio and sector benchmarks.

The Alvotech Narrative: What Would Justify Today's Price?

Simply Wall St Narratives pick up where the Alvotech valuation puzzle leaves off by clearly outlining which paths for Alvotech's growth, margins and earnings would need to hold for the stock to be worth materially more or less than today's price, and they sit within the Community page. Each narrative presents that implied fair value as a hypothesis about how Alvotech's business might develop over time, so you can see how well it holds up as new information arrives.

Community views on Alvotech sit far apart, with one camp seeing clear upside and another focusing on execution and balance sheet risks.

Bull case: 15% undervalued

"Strengthened strategic partnerships (e.g., Advanz Pharma, Teva, Dr. Reddy's) and expanding distribution footprint enable Alvotech to rapidly access new regions and patient pools as governments seek more cost-effective treatment options, likely enhancing future revenue predictability and operating margins..."

Bear case: 22% overvalued

"Significant portion of Alvotech's short-term and long-term revenue is dependent on milestone and licensing revenues, which leaders admit are lumpy and highly dependent on the timing of regulatory approvals and partner achievements..."

Do you think there's more to the story for Alvotech? Head over to our Community to see what others are saying!

The Bottom Line

Alvotech still screens as undervalued on market multiples, even after the recent share price move. This suggests investors are not paying the same revenue premium seen across many peers. The high value score points to a broadly supportive cross check rather than a single outlier signal. The key question from here is whether Alvotech can turn its pipeline and partnerships into a more predictable revenue and margin profile before funding needs and execution risks convince the market that the discount is justified rather than an opportunity.

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.