Arrowhead Pharmaceuticals (ARWR) has begun dosing participants in a Phase 1/2a trial of ARO DIMER PA, a dual gene targeting RNAi candidate for mixed hyperlipidemia related atherosclerotic cardiovascular disease.

The ARO DIMER PA dosing update comes after a strong run in Arrowhead Pharmaceuticals' shares, with a 90 day share price return of 92.87% and a 1 year total shareholder return of 289.54%. Momentum has been building recently, reflected in a 7 day share price return of 9.25% on top of a 7.69% 30 day share price return, even though the 5 year total shareholder return is still a 17.43% decline.

If this kind of clinical pipeline progress has your attention, it could be a good time to scan other healthcare stocks that might fit your watchlist next.

After a share price run that has already rewarded holders, Arrowhead now trades at US$73 with an intrinsic value estimate suggesting a discount and a modest gap to analyst targets. The question is whether there is still mispricing here or whether the market has already captured future growth.

Most Popular Narrative: 13.9% Overvalued

Compared with the last close at $73, the most followed narrative sees fair value closer to $64, using a detailed cash flow and margin framework.

Analysts have raised their price targets on Arrowhead Pharmaceuticals by roughly $6 to the mid $40s to low $60s range, citing the FDA approval of Redemplo, a strengthened commercial outlook in familial chylomicronemia syndrome and sHTG, and underappreciated long term cost and margin advantages.

Curious what sits behind that valuation gap. Revenue expectations move in one direction, margin assumptions in another, and the earnings multiple does the heavy lifting. The mix really matters.

Result: Fair Value of $64.08 (OVERVALUED)

However, the story can change quickly if key Phase 3 readouts disappoint or partner milestones slow. This could put Arrowhead’s revenue mix and earnings path under pressure.

Another Take: Cash Flows Tell a Different Story

While the most followed narrative sees Arrowhead as about 13.9% overvalued at a fair value of roughly $64, our DCF model points the other way, with a fair value estimate of $140.19 per share, well above the current $73 price. Which set of assumptions feels more realistic to you?

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Arrowhead Pharmaceuticals 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 876 undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own Arrowhead Pharmaceuticals Narrative

If the conclusions here do not quite line up with your own view or you simply prefer to work through the data yourself, you can build a personalized narrative in just a few minutes with Do it your way.

A great starting point for your Arrowhead Pharmaceuticals research is our analysis highlighting 2 key rewards and 3 important warning signs that could impact your investment decision.

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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.