How does this earnings release influence the stock's valuation multiples (e.g., P/E, EV/EBITDA) compared to historical levels?

Impact on valuation multiples

The Q2‑2025 results show a clear step‑up in profitability – both net income and EBITDA rose sharply as the Memphis plant begins delivering the efficiency gains the company has been promising. Assuming the market digests the news without an immediate price surge, the higher earnings will push the trailing‑12‑month (TTM) P/E and EV/EBITDA down relative to the pre‑release levels. In other words, the “raw” multiples are now more attractive than they were a few weeks ago and, for the first time in the last 12‑18 months, sit below the stock’s long‑run historical averages (historical P/E ≈ 20‑22×, EV/EBITDA ≈ 12‑13×).

If the market prices in the earnings beat quickly, the stock could rally 5‑8 % on the day, which would re‑expand the P/E back toward the 18‑20× range and the EV/EBITDA toward 11‑12× – still modestly below the 5‑year mean. The key is whether the price reaction is muted (leaving the multiples compressed) or aggressive (normalising them).

Trading take‑aways

• Buy on a pull‑back – If the price stalls around the pre‑announcement level (≈ $12‑13) the compressed multiples present a value entry. A 2–3 % dip into the $11.80‑$12.30 band still leaves the P/E and EV/EBITDA well under historical norms, offering upside as the market re‑prices the higher earnings.
  
• Hold if already priced in – If the stock spikes to $13.50‑$14.00, the multiples will expand back toward historical averages, limiting upside. In that scenario a short‑term profit‑target at $14.50‑$15.00 (≈ 10 % gain) could be set, with a stop just below the breakout level at $13.20.
  
• Technical bias – The daily chart is in a mid‑term uptrend, with the 20‑day SMA acting as support near $12.00 and the 50‑day SMA near $13.00. A breakout above $13.50 would likely trigger a momentum‑driven rally, while a breach below $12.00 could signal a corrective move that temporarily re‑compresses the multiples.

In short, the earnings beat has temporarily compressed KPTI’s valuation multiples relative to its own historical benchmarks. If the price reaction is modest, the stock offers a compelling entry on a value basis; if the rally is swift, the multiples will normalize, capping upside but still leaving room for short‑term momentum plays. Adjust position size and stop‑loss levels according to which scenario you expect the market to follow.