Assessing Alvotech (NasdaqGM:ALVO)’s Valuation After FDA Setback and 2025 Guidance Cut

Simply Wall St.12-22 02:21

Alvotech (NasdaqGM:ALVO) stock has been under pressure after the FDA issued a Complete Response Letter related to deficiencies at its Reykjavik manufacturing site, which forced the company to cut 2025...

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See our latest analysis for Alvotech. Those manufacturing setbacks and shareholder investigations have clearly reset expectations, with the 90 day share price return of minus 38.83 percent and year to date share price return of minus 62.77 percent showing momentum is still weak, despite management reaffirming growth plans supported by fresh convertible bond funding and a 2026 revenue outlook. If this kind of volatility has you looking across healthcare, it could be worth exploring other healthcare stocks that are building steadier track records and diversified pipelines. With the share price now deeply discounted relative to analyst targets, but future launches and regulatory risks still in flux, is Alvotech a mispriced turnaround story, or is the market fairly discounting its growth ambitions? Most Popular Narrative Narrative: 77.9% Undervalued With Alvotech last closing at $4.90 against an implied fair value around $22.17, the prevailing narrative sees a wide gap between price and long term potential.  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.  Read the complete narrative. Curious how sustained double digit growth, rising margins, and a lower future earnings multiple can still justify such a big upside gap? The full narrative unpacks the specific launch milestones, margin shifts, and valuation math that drive this aggressive fair value call. Result: Fair Value of $22.17 (UNDERVALUED) Have a read of the narrative in full and understand what's behind the forecasts. However, persistent FDA scrutiny and lumpy, approval linked milestone revenue could derail launch timelines and cash flow, which could challenge even optimistic turnaround assumptions. Find out about the key risks to this Alvotech narrative. Another Angle on Valuation On earnings, Alvotech looks less one sided. Its price to earnings ratio of 22.1 times sits above the US biotech average of 20.7 times, but well below peers at 46.4 times and under a fair ratio of 26 times. This hints at upside, yet also near term de rating risk if execution slips. See what the numbers say about this price — find out in our valuation breakdown. NasdaqGM:ALVO PE Ratio as at Dec 2025 Build Your Own Alvotech Narrative If you see the story differently, or want to dig into the numbers yourself, you can build a personalized thesis in just a few minutes: Do it your way. A great starting point for your Alvotech research is our analysis highlighting 3 key rewards and 4 important warning signs that could impact your investment decision. Ready for more investing opportunities? Before you move on, lock in your next potential winner by using the Simply Wall Street Screener to pinpoint stocks that match your strategy and risk comfort.  Target steady income streams by reviewing these 12 dividend stocks with yields > 3% that can support long term returns through market cycles. Seize high potential growth by scanning these 24 AI penny stocks riding the surge in artificial intelligence adoption across industries. Capitalize on pricing gaps by filtering for these 913 undervalued stocks based on cash flows where market sentiment has not yet caught up with fundamentals.   This article by Simply Wall St is general in nature. We provide commentary based on historical data\n    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\n    financial situation. We aim to bring you long-term focused analysis driven by fundamental data.\n    Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.\n    Simply Wall St has no position in any stocks mentioned.Mobile Infrastructure for Defense and DisasterThe next wave in robotics isn't humanoid. Its fully autonomous towers delivering 5G, ISR, and radar in under 30 minutes, anywhere.Get the investor briefing before the next round of contractsSponsored On Behalf of CiTechNew: Manage All Your Stock Portfolios in One PlaceWe've created the ultimate portfolio companion for stock investors, and it's free.• Connect an unlimited number of Portfolios and see your total in one currency• Be alerted to new Warning Signs or Risks via email or mobile• Track the Fair Value of your stocksTry a Demo Portfolio for FreeHave feedback on this article? Concerned about the content? Get in touch with us directly. 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