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Investing.com - Chardan Capital Markets lowered its price target on Krystal Biotech (NASDAQ:KRYS) to $216.00 from $219.00 on Friday, while maintaining a Buy rating on the stock. The new target still represents significant upside potential for the biotech company, which currently trades at $145.70 and shows impressive gross profit margins of 93.37%. According to InvestingPro analysis, the stock appears undervalued relative to its Fair Value.
The adjustment follows Krystal Biotech’s strategic shift away from its intratumoral KB707 program toward an inhaled delivery approach, which Chardan analyst Geulah Livshits noted was driven by "differentiated signal in the KYANITE trial." The company’s strong financial health, with a "GREAT" rating from InvestingPro and robust revenue growth of 116% over the last twelve months, positions it well to execute this strategic pivot.
Chardan removed the intratumoral program from its projections but partially offset this by increasing the probability of success for the inhaled program from 13% to 20%, reflecting greater confidence in this development pathway.
The research firm acknowledged that regulatory uncertainty for intratumoral immunotherapy programs has increased following a recent FDA decision on RP1, which came after a Stat opinion piece that may have influenced the timing of Krystal’s OPAL disclosure.
While KB707 is not currently a major component of Chardan’s valuation model for Krystal Biotech, the firm indicated that alignment on a favorable development path with FDA leadership could attract more attention if the program continues to show encouraging safety and activity signals with emerging durability data. The company maintains a strong balance sheet with more cash than debt, and its PEG ratio of 0.79 suggests attractive valuation relative to its growth prospects.
In other recent news, Krystal Biotech reported stronger-than-expected earnings for the second quarter of 2025, with earnings per share of $1.29, surpassing the forecast of $1.22. The company’s revenue reached $96.04 million, exceeding expectations of $92.24 million. Despite these positive results, management indicated that third-quarter revenue might be lower due to patient pausing trends. Additionally, BofA Securities lowered its price target for Krystal Biotech to $182 from $192, maintaining a Buy rating but expressing concerns about the near-term growth trajectory. In another development, the company has been granted an End of Phase 2 meeting with the FDA to discuss potential registration pathways for its inhaled KB707 immunotherapy treatment for non-small cell lung cancer. This therapy is designed to express interleukin-2 and interleukin-12 in the tumor microenvironment. H.C. Wainwright reiterated its Buy rating and $240 price target, focusing on the company’s oncology program KB707. Krystal Biotech is prioritizing the clinical advancement of the inhaled form of KB707 for treating advanced non-small cell lung cancer.
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