Is Ligand Pharmaceuticals, Inc. overvalued or undervalued?

As of 27 February 2025, Ligand Pharmaceuticals, Inc. has moved from a fair to a risky valuation grade. The company is currently considered overvalued, particularly given its negative earnings and poor return metrics. Key ratios include a Price to Book Value of 2.57, an EV to EBITDA of 88.07, and a ROE of -9.97%.
In comparison to its peers, Ligand's P/E ratio is notably negative at -27.37, while Catalyst Pharmaceuticals, Inc. presents a much more attractive P/E of 14.87 and an EV to EBITDA of 8.36. Other risky peers like Mirum Pharmaceuticals, Inc. show an even worse P/E of -32.47, highlighting the challenges Ligand faces in the current market. Despite recent stock performance showing a 44.82% return over the past year, which outpaces the S&P 500's 10.26%, the underlying financial metrics suggest that Ligand Pharmaceuticals is not positioned favorably for sustained growth.