Kuros Biosciences AG's (VTX:KURN) P/S Is On The Mark

There wouldn't be many who think Kuros Biosciences AG's (VTX:KURN) price-to-sales (or "P/S") ratio of 9.7x is worth a mention when the median P/S for the Biotechs industry in Switzerland is similar at about 9.3x. While this might not raise any eyebrows, if the P/S ratio is not justified investors could be missing out on a potential opportunity or ignoring looming disappointment.

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See our latest analysis for Kuros Biosciences

How Kuros Biosciences Has Been Performing

With revenue growth that's inferior to most other companies of late, Kuros Biosciences has been relatively sluggish. One possibility is that the P/S ratio is moderate because investors think this lacklustre revenue performance will turn around. If not, then existing shareholders may be a little nervous about the viability of the share price.

Want the full picture on analyst estimates for the company? Then our free report on Kuros Biosciences will help you uncover what's on the horizon.

How Is Kuros Biosciences' Revenue Growth Trending?

The only time you'd be comfortable seeing a P/S like Kuros Biosciences' is when the company's growth is tracking the industry closely.

Retrospectively, the last year delivered an exceptional 83% gain to the company's top line. The latest three year period has also seen an incredible overall rise in revenue, aided by its incredible short-term performance. Accordingly, shareholders would have been over the moon with those medium-term rates of revenue growth.

Turning to the outlook, the next three years should generate growth of 27% each year as estimated by the only analyst watching the company. That's shaping up to be similar to the 26% each year growth forecast for the broader industry.

In light of this, it's understandable that Kuros Biosciences' P/S sits in line with the majority of other companies. It seems most investors are expecting to see average future growth and are only willing to pay a moderate amount for the stock.

The Final Word

Generally, our preference is to limit the use of the price-to-sales ratio to establishing what the market thinks about the overall health of a company.

Our look at Kuros Biosciences' revenue growth estimates show that its P/S is about what we expect, as both metrics follow closely with the industry averages. Right now shareholders are comfortable with the P/S as they are quite confident future revenue won't throw up any surprises. All things considered, if the P/S and revenue estimates contain no major shocks, then it's hard to see the share price moving strongly in either direction in the near future.

Plus, you should also learn about this 1 warning sign we've spotted with Kuros Biosciences.

If strong companies turning a profit tickle your fancy, then you'll want to check out this free list of interesting companies that trade on a low P/E (but have proven they can grow earnings).

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.