ImmunityBio (IBRX): Evaluating Valuation After Q3 Revenue Growth and Operational Improvements

ImmunityBio (IBRX) attracted renewed investor attention after reporting third-quarter results that saw product revenue climb, supported by stronger demand for Anktiva in combination with BCG for NMIBC with CIS. The company also narrowed its net loss year-over-year, a sign that rising sales are helping stabilize its financials.

See our latest analysis for ImmunityBio.

ImmunityBio's operational progress has helped steady some nerves, but momentum in the share price has yet to recover. The stock is down nearly 20% over the past month and off 17% year-to-date, while the one-year total shareholder return sits sharply lower at -58%. Following updates like the Jefferies London Healthcare Conference presentation, investors continue to weigh long-term growth potential against recent volatility.

If you’re watching how ImmunityBio navigates its next chapter, this could be a great moment to explore other healthcare companies. See the full list for free with our See the full list for free..

With shares sharply down over the last year despite surging product revenue, the question for investors is clear: is ImmunityBio trading at a bargain given its growth, or is the market already looking ahead?

Price-to-Sales of 25.4x: Is it justified?

ImmunityBio trades at a price-to-sales ratio of 25.4x, which is significantly higher than both its biotech peers and the broader industry. With the last close at $2.13 per share, this steep multiple raises questions about how much future growth is already priced into the stock versus what value investors are truly getting.

The price-to-sales ratio measures how much investors are willing to pay for each dollar of company sales. In biotech, this metric is often used instead of price-to-earnings because many companies are unprofitable and rely on future revenue growth to justify their valuations.

A ratio at this level suggests that investors expect substantial future sales growth. ImmunityBio is currently unprofitable, and its valuation is higher than the US Biotechs industry average of 13.1x, as well as the peer group average of 22.1x. However, compared to the company’s fair price-to-sales ratio of 30.9x, there is some evidence that the market could support a higher level if optimistic growth targets are met.

Explore the SWS fair ratio for ImmunityBio

Result: Price-to-Sales of 25.4x (OVERVALUED)

However, continued net losses and sharp share price declines could signal deeper confidence issues. This makes sustained recovery far from guaranteed for ImmunityBio.

Find out about the key risks to this ImmunityBio narrative.

Another View: Discounted Cash Flow Model

While ImmunityBio’s price-to-sales ratio paints a picture of an overvalued stock, the SWS DCF model offers a contrasting perspective. According to this approach, ImmunityBio appears to be trading at a 66% discount to its estimated fair value of $6.27 per share. This suggests the potential for upside if market sentiment shifts.

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

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out ImmunityBio for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 928 undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own ImmunityBio Narrative

If you believe there’s another angle or want to analyze the numbers on your own terms, it only takes a few minutes to craft your perspective. Do it your way.

A great starting point for your ImmunityBio research is our analysis highlighting 2 key rewards and 3 important warning signs that could impact your investment decision.

Looking for more investment ideas?

Don’t wait while opportunities pass by. Expand your investing strategy and get ahead by checking out handpicked stocks in these powerful growth and value areas:

• Boost your portfolio with smart picks by scanning these 928 undervalued stocks based on cash flows, which could be trading well below their true worth.
• Capitalize on breakthrough innovation in healthcare technology by exploring these 30 healthcare AI stocks, a selection of companies leading advances in AI-driven medicine and diagnostics.
• Seize the chance to ride the next digital currency wave and uncover growth with these 82 cryptocurrency and blockchain stocks.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com