Is Ligand Pharmaceuticals, Inc. overvalued or undervalued?

As of 27 February 2025, Ligand Pharmaceuticals, Inc. has moved from an attractive to a risky valuation grade. The company appears to be overvalued, given its high valuation ratios, including a Price to Book Value of 2.57, an EV to Sales ratio of 10.12, and an EV to EBITDA ratio of 88.07. In comparison to peers, TG Therapeutics, Inc. has a P/E ratio of 83.91, while Catalyst Pharmaceuticals, Inc. stands out with a much lower P/E of 12.14, indicating that Ligand is trading at a premium relative to its industry.
Despite this overvaluation, Ligand has shown strong stock performance, with a year-to-date return of 58.50% compared to the S&P 500's 12.22%. However, the significant losses reflected in its negative ROCE of -2.83% and ROE of -9.97% further underscore the risks associated with its current valuation.