Market Participants Recognise Kuros Biosciences AG's (VTX:KURN) Revenues Pushing Shares 37% Higher

Despite an already strong run, Kuros Biosciences AG (VTX:KURN) shares have been powering on, with a gain of 37% in the last thirty days. The last 30 days were the cherry on top of the stock's 758% gain in the last year, which is nothing short of spectacular.

After such a large jump in price, given around half the companies in Switzerland's Biotechs industry have price-to-sales ratios (or "P/S") below 4x, you may consider Kuros Biosciences as a stock to avoid entirely with its 11.6x P/S ratio. Although, it's not wise to just take the P/S at face value as there may be an explanation why it's so lofty.

Check out our latest analysis for Kuros Biosciences

What Does Kuros Biosciences' Recent Performance Look Like?

With revenue growth that's exceedingly strong of late, Kuros Biosciences has been doing very well. Perhaps the market is expecting future revenue performance to outperform the wider market, which has seemingly got people interested in the stock. If not, then existing shareholders might be a little nervous about the viability of the share price.

We don't have analyst forecasts, but you can see how recent trends are setting up the company for the future by checking out our free report on Kuros Biosciences' earnings, revenue and cash flow.

How Is Kuros Biosciences' Revenue Growth Trending?

There's an inherent assumption that a company should far outperform the industry for P/S ratios like Kuros Biosciences' to be considered reasonable.

Retrospectively, the last year delivered an exceptional 157% gain to the company's top line. Spectacularly, three year revenue growth has ballooned by several orders of magnitude, thanks in part to the last 12 months of revenue growth. So we can start by confirming that the company has done a tremendous job of growing revenue over that time.

Comparing that to the industry, which is only predicted to deliver 48% growth in the next 12 months, the company's momentum is stronger based on recent medium-term annualised revenue results.

With this in consideration, it's not hard to understand why Kuros Biosciences' P/S is high relative to its industry peers. It seems most investors are expecting this strong growth to continue and are willing to pay more for the stock.

What Does Kuros Biosciences' P/S Mean For Investors?

Kuros Biosciences' P/S has grown nicely over the last month thanks to a handy boost in the share price. Typically, we'd caution against reading too much into price-to-sales ratios when settling on investment decisions, though it can reveal plenty about what other market participants think about the company.

We've established that Kuros Biosciences maintains its high P/S on the strength of its recent three-year growth being higher than the wider industry forecast, as expected. In the eyes of shareholders, the probability of a continued growth trajectory is great enough to prevent the P/S from pulling back. Unless the recent medium-term conditions change, they will continue to provide strong support to the share price.

Don't forget that there may be other risks. For instance, we've identified 3 warning signs for Kuros Biosciences (2 make us uncomfortable) you should be aware of.

If you're unsure about the strength of Kuros Biosciences' business, why not explore our interactive list of stocks with solid business fundamentals for some other companies you may have missed.

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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.