Alvotech (ALVO) shares have been in focus after the company reported positive top line pharmacokinetic data for its AVT80 biosimilar candidate to Entyvio, along with new supply and commercialization agreements with Sandoz in Canada, Australia and New Zealand.

These fresh clinical results and the Sandoz agreements come after a mixed share price pattern, with a 12.07% 1 month share price return and a 4.00% year to date share price return contrasting with a 12 month total shareholder return decline of 58.99%, which suggests recent momentum is improving from a weak longer term base.

If this kind of biotech news has your attention, it could be a good time to widen your search and check out 27 healthcare AI stocks identified by the Simply Wall St screener.

With Alvotech trading at US$5.20 and both the intrinsic estimate and analyst target sitting higher, the key question is whether the current price still reflects a discount or if the market is already pricing in future growth.

Most Popular Narrative: 76.5% Undervalued

Alvotech's most followed narrative pegs fair value at about $22.17 per share, compared with the last close at $5.20. This frames a wide valuation gap built on long term biosimilar rollout assumptions and facility remediation progress.

Ongoing launch and approval pipeline activity, including upcoming regulatory decisions in major global markets (for AVT03, AVT05, AVT23, and others), positions the company to tap into blockbuster biologic markets coming off patent, potentially driving a step change in topline revenue once approvals are secured.

Curious how this story gets from today’s price to that higher fair value? The narrative leans heavily on aggressive revenue scaling and much richer margins, all pulled back to today using a specific discount rate and an earnings multiple that will surprise many biotech investors.

Result: Fair Value of $22.17 (UNDERVALUED)

However, these assumptions still run into real world risks, including FDA related delays at the Reykjavik facility and intense price competition across core Humira and Stelara biosimilars.

Another Angle On Valuation

If you set that $22.17 fair value aside for a moment and just look at the current P/E, Alvotech trades around 23.4x earnings versus 22x for the broader US biotech group and a fair ratio of 26.9x. So is this a sensible middle ground, or a valuation that still leaves limited room for error?

Build Your Own Alvotech Narrative

If you see the numbers differently or want to test your own assumptions, you can build a complete Alvotech story yourself in just a few minutes using Do it your way.

A great starting point for your Alvotech research is our analysis highlighting 3 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.