WEBULL

Market Participants Recognise Adaptive Biotechnologies Corporation's (NASDAQ:ADPT) Revenues Pushing Shares 29% Higher

Simply Wall St · 05/31 13:00

Adaptive Biotechnologies Corporation (NASDAQ:ADPT) shareholders would be excited to see that the share price has had a great month, posting a 29% gain and recovering from prior weakness. The last month tops off a massive increase of 176% in the last year.

Following the firm bounce in price, given around half the companies in the United States' Life Sciences industry have price-to-sales ratios (or "P/S") below 2.4x, you may consider Adaptive Biotechnologies as a stock to avoid entirely with its 7.6x P/S ratio. However, the P/S might be quite high for a reason and it requires further investigation to determine if it's justified.

AI is about to change healthcare. These 20 stocks are working on everything from early diagnostics to drug discovery. The best part - they are all under $10bn in marketcap - there is still time to get in early.

Check out our latest analysis for Adaptive Biotechnologies

ps-multiple-vs-industry
NasdaqGS:ADPT Price to Sales Ratio vs Industry May 31st 2025

How Adaptive Biotechnologies Has Been Performing

With revenue growth that's superior to most other companies of late, Adaptive Biotechnologies has been doing relatively well. It seems that many are expecting the strong revenue performance to persist, which has raised the P/S. However, if this isn't the case, investors might get caught out paying too much for the stock.

Keen to find out how analysts think Adaptive Biotechnologies' future stacks up against the industry? In that case, our free report is a great place to start.

How Is Adaptive Biotechnologies' Revenue Growth Trending?

The only time you'd be truly comfortable seeing a P/S as steep as Adaptive Biotechnologies' is when the company's growth is on track to outshine the industry decidedly.

Retrospectively, the last year delivered a decent 8.6% gain to the company's revenues. The solid recent performance means it was also able to grow revenue by 23% in total over the last three years. Accordingly, shareholders would have probably been satisfied with the medium-term rates of revenue growth.

Shifting to the future, estimates from the eight analysts covering the company suggest revenue should grow by 21% per year over the next three years. That's shaping up to be materially higher than the 6.9% per annum growth forecast for the broader industry.

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

The Bottom Line On Adaptive Biotechnologies' P/S

Shares in Adaptive Biotechnologies have seen a strong upwards swing lately, which has really helped boost its P/S figure. While the price-to-sales ratio shouldn't be the defining factor in whether you buy a stock or not, it's quite a capable barometer of revenue expectations.

As we suspected, our examination of Adaptive Biotechnologies' analyst forecasts revealed that its superior revenue outlook is contributing to its high P/S. It appears that shareholders are confident in the company's future revenues, which is propping up the P/S. Unless the analysts have really missed the mark, these strong revenue forecasts should keep the share price buoyant.

Plus, you should also learn about these 3 warning signs we've spotted with Adaptive Biotechnologies.

If companies with solid past earnings growth is up your alley, you may wish to see this free collection of other companies with strong earnings growth and low P/E ratios.