ORIC Pharmaceuticals (ORIC) stock has been in focus after fresh buy ratings from several research firms coincided with encouraging trial updates for its lead oncology drugs and a new collaboration with Johnson & Johnson.

The recent news flow and analyst enthusiasm appear to be feeding into the share price, with ORIC’s 7 day share price return of 36.33% and year to date share price return of 41.00% standing against a 1 year total shareholder return of 14.74% and a 3 year total shareholder return of 84.91%. However, the 5 year total shareholder return of a 64.76% decline shows how sentiment around its pipeline has shifted over time.

If ORIC’s recent move has you looking across the sector, it could be a good moment to scan healthcare stocks for other potential healthcare names on your radar.

With the stock at US$11.52 and analysts setting price targets well above that, along with a long list of clinical and collaboration updates ahead, the key question is simple: is there still upside here, or is the market already pricing in future growth?

Price to Book of 2.8x: Is It Justified?

ORIC Pharmaceuticals last closed at US$11.52, and on a P/B of 2.8x it screens cheaper than some peers, yet slightly richer than the broader biotech group.

The P/B ratio compares the company’s market value to its net assets. It is often used for loss making or early stage biotechs where earnings are not yet a guide. For ORIC, which currently reports no revenue and a net loss of US$135.27m, the balance sheet and pipeline expectations carry much of the weight in how the market is pricing the shares.

According to the statements, ORIC’s 2.8x P/B is below a peer average of 5.9x. This points to a lower valuation than similar names some investors might group it with. At the same time, that 2.8x P/B sits slightly above the wider US Biotechs industry average of 2.7x, so the stock is not being marked down heavily across the board, but it is also not priced at the top end of the sector.

Result: Price-to-book of 2.8x (ABOUT RIGHT)

However, there are clear pressure points here, including ORIC’s US$135.27m net loss and the ever present clinical trial and collaboration risks across its early stage pipeline.

Build Your Own ORIC Pharmaceuticals Narrative

If you would rather weigh the data yourself and reach your own view, you can piece together a personalised thesis for ORIC in just a few minutes, Do it your way.

A great starting point for your ORIC Pharmaceuticals research is our analysis highlighting 4 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.