Why CureVac's latest trial milestone matters for shareholders

CureVac (CVAC) has completed a Phase 1 clinical study for its CVGBM mRNA based brain cancer vaccine in patients with surgically resected glioblastoma or astrocytoma, marking a key early checkpoint for its oncology pipeline.

The completion of the CVGBM Phase 1 study comes after a sharp 14.32% 1 day share price decline and a 19.18% 7 day share price return. However, CureVac’s year to date share price return of 19.71% and 1 year total shareholder return of 50.18% suggest investors are weighing short term volatility against the longer term potential of its mRNA pipeline.

If this early stage cancer vaccine news has you thinking about where else mRNA and related tech could go next, take a look at our screener of 25 healthcare AI stocks to see how other companies are approaching the intersection of biotech and AI.

With CureVac shares recently down over 20% in 30 days but still up 19.71% year to date and trading below some analyst targets, is the recent pullback creating an opening, or is the market already pricing in future growth?

Price to earnings of 6.1x: Is it justified?

On a simple P/E comparison, CureVac’s current price around $4.13 equates to roughly 6.1x earnings, which sits well below both peers and the wider US biotech industry.

The P/E ratio tells you how much investors are paying today for each dollar of current earnings, and it is a quick way to compare profit-based valuations across similar companies. For CureVac, a 6.1x P/E sits against a peer average of 40.7x and a US biotech industry average of 18.6x. This indicates the market is valuing its earnings at a lower level than many comparables right now.

That gap is important context when you pair it with CureVac’s track record of becoming profitable over the past 5 years, earnings growth of 34.1% per year over that period, and a current return on equity of 14.8% that is described as low relative to a 20% benchmark. The fair P/E estimate of 16.9x indicates a level the market could move toward if sentiment around its earnings quality and growth prospects aligns more closely with the regression-based fair ratio.

Result: Price to earnings of 6.1x (UNDERVALUED)

However, you still need to keep in mind trial setbacks or weaker adoption of its mRNA candidates, which could challenge both sentiment and that low P/E narrative.

Another view using the SWS DCF model

The SWS DCF model paints a very different picture to the 6.1x P/E. At a recent price of $4.13, our DCF fair value estimate sits at $30.47, which implies a very large discount. That kind of gap can signal either opportunity or that the model is too optimistic. Which feels more realistic to you?

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out CureVac 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 53 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

If this all feels like a mixed picture, take a moment to check the numbers yourself and decide where you stand. You can start with 5 key rewards and 1 important warning sign.

Looking for more investment ideas?

Before you close this tab, take a few minutes to scan other opportunities that could balance or complement a position like CureVac in your portfolio.

• Target quality at a discount by checking out our 53 high quality undervalued stocks which may appeal if you are hunting for stocks priced below their fundamentals.
• Strengthen your income stream by reviewing 13 dividend fortresses that focuses on higher yielding companies with an eye on durability.
• Protect your downside by screening 80 resilient stocks with low risk scores that may better match a cautious risk profile while still keeping you invested.

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.