Is Erasca (ERAS) an Overvalued Company?

Erasca may be overvalued with poor growth indicators, but the 6 analysts following the company give it an average rating of buy. The analysts have set target prices ranging from $10.0 to $22.0 per share, for an average of $16.67. At today's price of $2.99, Erasca is trading -82.06% away from its average target price, suggesting there is an analyst consensus of strong upside potential.

Erasca, Inc., a clinical-stage biopharmaceutical company, focuses on discovering, developing, and commercializing therapies for patients with RAS/MAPK pathway-driven cancers. Based in San Diego, CA, the small-cap Health Care company has 129 full time employees. Erasca has not offered a dividend during the last year.

Erasca does not have a meaningful trailing P/E ratio since its earnings per share are negative. Its forward EPS guidance is negative too, at -1.82. The average P/E ratio for the Health Care sector is 24.45. On the other hand, the market is undervaluing Erasca in terms of its net assets because its P/B ratio is 1.1. In comparison, the sector average is 4.16.

If analysts are willing to give the company a decent rating despite its valuation issues, its likely because they believe in the potential of the company's new products. But for now, conservative will likely steer clear as the company has no record of revenues.