A Look at ImmunityBio (IBRX) Valuation Following New Data on ANKTIVA’s Impact in Advanced Lung Cancer

ImmunityBio (IBRX) just captured the spotlight at a leading oncology conference, unveiling new data from its Phase 2 QUILT-3.055 study for ANKTIVA in advanced non-small cell lung cancer (NSCLC). The findings show ANKTIVA can actually reverse lymphopenia, a persistent loss of the immune system’s key cancer-fighting cells, in patients who have stopped responding to existing checkpoint inhibitor treatments. In addition, this immune recovery appears directly linked to a meaningful boost in overall survival. This potentially opens the door to a fresh approach for a major unmet need in cancer care.

This announcement comes as ImmunityBio’s stock price has see-sawed over the past year, dipping around 15% but rebounding 10% in the past month. Earlier this year, the company made headlines for FDA approval of ANKTIVA in bladder cancer. Anticipation has also grown around the Phase 3 ResQ201A trial combining ANKTIVA with a checkpoint inhibitor in later-line NSCLC. The new results could help shift investor perceptions, especially with momentum beginning to build after a challenging period for the stock.

Now, with ImmunityBio showing clinical progress and signs of renewed interest in its pipeline, the real question is whether there is still untapped upside here or if the market’s optimism has already priced in the next chapter of growth.

Price-to-Sales of 46.9x: Is it justified?

ImmunityBio appears overvalued based on its price-to-sales ratio, which is much higher than both the peer and industry averages. This widely used valuation metric suggests investors are paying a steep premium for each dollar of the company's annual revenues.

The price-to-sales (P/S) multiple is particularly relevant for biotech companies like ImmunityBio, where many firms are not yet profitable and earnings-based metrics can be misleading. The P/S ratio allows for comparison relative to sales rather than net income. This makes it a popular tool for evaluating early-stage or growth-focused biotech firms. However, a significantly higher P/S could mean the stock price reflects high future expectations that may not yet be justified by current fundamentals.

Given ImmunityBio's elevated P/S valuation, the market seems to be pricing in rapid future growth or a series of breakthrough milestones. Whether the company can deliver on those expectations will be critical to justifying its lofty sales-based multiple.

Result: Fair Value of $5.68 (UNDERVALUED)

See our latest analysis for ImmunityBio.

However, risks remain if ImmunityBio’s drug milestones face delays or if revenue growth slows. These factors could quickly challenge the bullish outlook now taking hold.

Find out about the key risks to this ImmunityBio narrative.

Another View: Discounted Cash Flow Perspective

Looking at ImmunityBio’s valuation through our DCF model, the results point to the shares being undervalued. This aligns with what the sales-based measure suggests. However, whether reality will reflect either model's optimism as the story develops remains to be seen.

Look into how the SWS DCF model arrives at its fair value.

Stay updated when valuation signals shift by adding ImmunityBio to your watchlist or portfolio. Alternatively, explore our screener to discover other companies that fit your criteria.

Build Your Own ImmunityBio Narrative

If you want a different take or enjoy digging into the numbers on your own, you can create a personalized thesis in just a few minutes. Do it your way

A great starting point for your ImmunityBio research is our analysis highlighting 2 key rewards and 2 important warning signs that could impact your investment decision.

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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.

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