Telix Pharmaceuticals Ltd (ASX: TLX) shares have been a standout performer over the past 5 years.
The ASX 200 radiopharmaceutical company has soared a staggering 1,667% over that timeframe.
Over the past year, shares are up 21%.
Early and recent investors in Telix Pharmaceuticals have been well rewarded for backing the company.
But, what's the outlook for the stock today? Is it fully valued?
Let's see what one expert had to say.
JP Morgan initiates coverage
For those not familiar with the stock, Telix Pharmaceuticals is a pure-play radiotheranostics oncology-focused company with both diagnostics and therapeutics. It targets cancers of the prostate, kidney, and brain. It has risen to prominence in recent years, and now has a market capitalisation of around $8 billion.
The company has been growing at a rapid rate.
Telix's prostate cancer imaging agent, Illuccix, has experienced rapid growth since its launch in 2021. In its most recent quarter, Telix generated US$151 million in Illuccix revenue, marking a 35% increase year-on-year. Illuccix currently accounts for around 25% of the US market.
At its most recent investor day in June, management outlined a strategy that it believes can expand its total addressable market (TAM) to over US$6.7 billion.
Yesterday, JP Morgan Chase & Co (NYSE: JPM) initiated coverage of Telix Pharmaceuticals, with an outperform rating.
The broker described Telix as "uniquely positioned as a vertically integrated radiopharmaceutical company, boasting positive cash flow and an ambitious management team that has built a leading radiopharmaceutical enterprise".
JP Morgan has placed a price target of $31 on the stock. Given that shares are changing hands at $24.03 at the time of writing, this suggests 30% upside from here.
JP Morgan cited the addition of two new imaging agents (Gozellix and Zircaix), with a third expected in 2026, as significant growth drivers.
The broker also said:
A significant portion of Telix's valuation appeal lies in its late-stage therapeutic pipeline, which, if successful, will address a substantial unmet need and complement the company's established diagnostics offerings. Enhancing its attractiveness is Telix's market-leading radioisotope manufacturing and supply chain.
These treatments have the potential to become the first radiotherapies available for kidney and brain cancer, and would complement the diagnostic portfolio, enhancing the commercial opportunity.
What are other experts saying?
Earlier this month, The Motley Fool's James Mickleboro shared the view of another expert who is even more optimistic about Telix's future.
On 11 July, Bell Potter affirmed its $34 price target on the radiopharmaceuticals company's shares.
In that research note, the broker noted that FDA approval for its Zircaix product in the US market would give it a first-mover advantage.
Bell Potter said the company was close to learning the outcome of that decision:
The approval of the Biological Licence Application for Zircaix is now looming with a PDUFA date of 27 August. If approved, Zircaix will become the first radiopharmaceutical imaging agent to receive a label for the imaging of any renal mass.
Foolish Takeaway
Despite Telix's meteoric rise, two experts continue to see significant upside potential for the radiopharmaceutical stock. This serves as a reminder to investors about the duration of growth that is possible for the most promising ASX companies.
A stock doesn't always have to be materially down from its peak to be attractively valued. Rather, the best growth companies can continue rising at a rapid rate for years, or even decades. For those interested in Telix Pharmaceuticals shares, it's not too late to invest, according to at least two leading experts.
