Kodiak Sciences (KOD) just wrapped up a sizable follow on stock offering, raising roughly $160 million to help fund its late stage eye disease drug programs and shore up its balance sheet.

That capital raise lands after a huge run, with Kodiak’s 90 day share price return of 73.22 percent and year to date share price return of 201.62 percent, signalling strong, speculative momentum despite a bruising 5 year total shareholder return of negative 83.12 percent.

If this kind of high risk biotech story interests you, it might be worth exploring other potential movers among healthcare stocks to see what else fits your strategy.

With shares now trading above the latest analyst targets after a sevenfold surge in six months, are investors still underestimating Kodiak’s late stage pipeline, or is the market already pricing in all that future growth?

Price to Book of 58.1x, Is it justified?

Based on its latest close at $26.00, Kodiak screens as richly priced against peers, with investors paying a steep premium for each dollar of net assets.

The valuation conversation here revolves around the price to book ratio, which compares the market value of the company to its accounting book value. For early stage, loss making biotechs with little to no revenue, this metric often becomes a shorthand for how much optimism the market has about the future commercial potential of the pipeline.

In Kodiak’s case, the statements flag that the stock is expensive on this measure, with a price to book ratio of 58.1 times. That suggests the market is assigning a very high implied value to its retinal disease programs, even though the company remains unprofitable and is forecast to stay that way over the next three years.

Compared to the broader US Biotechs industry average price to book of 2.6 times, Kodiak’s 58.1 times multiple is strikingly higher, and it also sits well above the 7.9 times peer average. This gulf underlines just how aggressively the stock is being valued relative to both its direct competitors and the sector overall.

Result: Price to book of 58.1x (OVERVALUED)

However, setbacks in pivotal retinal trials or a sharp reversal in speculative biotech sentiment could quickly unwind Kodiak’s premium valuation and recent share price momentum.

Build Your Own Kodiak Sciences Narrative

If you see the story differently, or want to dig into the numbers yourself, you can build a personalised view in just minutes: Do it your way.

A great starting point for your Kodiak Sciences research is our analysis highlighting 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.