Immunocore Holdings plc's (NASDAQ:IMCR) Price Is Right But Growth Is Lacking After Shares Rocket 27%

Simply Wall St · 06/10 13:21

Immunocore Holdings plc (NASDAQ:IMCR) shareholders have had their patience rewarded with a 27% share price jump in the last month. Not all shareholders will be feeling jubilant, since the share price is still down a very disappointing 11% in the last twelve months.

Although its price has surged higher, Immunocore Holdings may still be sending buy signals at present with its price-to-sales (or "P/S") ratio of 5.4x, considering almost half of all companies in the Biotechs industry in the United States have P/S ratios greater than 8.6x and even P/S higher than 53x aren't out of the ordinary. Nonetheless, we'd need to dig a little deeper to determine if there is a rational basis for the reduced P/S.

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Check out our latest analysis for Immunocore Holdings

ps-multiple-vs-industry
NasdaqGS:IMCR Price to Sales Ratio vs Industry June 10th 2025

What Does Immunocore Holdings' P/S Mean For Shareholders?

Recent times haven't been great for Immunocore Holdings as its revenue has been rising slower than most other companies. The P/S ratio is probably low because investors think this lacklustre revenue performance isn't going to get any better. If this is the case, then existing shareholders will probably struggle to get excited about the future direction of the share price.

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

Do Revenue Forecasts Match The Low P/S Ratio?

The only time you'd be truly comfortable seeing a P/S as low as Immunocore Holdings' is when the company's growth is on track to lag the industry.

Taking a look back first, we see that the company grew revenue by an impressive 26% last year. This great performance means it was also able to deliver immense revenue growth over the last three years. 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 15% each year as estimated by the analysts watching the company. Meanwhile, the rest of the industry is forecast to expand by 109% each year, which is noticeably more attractive.

With this in consideration, its clear as to why Immunocore Holdings' P/S is falling short industry peers. It seems most investors are expecting to see limited future growth and are only willing to pay a reduced amount for the stock.

The Bottom Line On Immunocore Holdings' P/S

Despite Immunocore Holdings' share price climbing recently, its P/S still lags most other companies. 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.

As we suspected, our examination of Immunocore Holdings' analyst forecasts revealed that its inferior revenue outlook is contributing to its low P/S. Shareholders' pessimism on the revenue prospects for the company seems to be the main contributor to the depressed P/S. The company will need a change of fortune to justify the P/S rising higher in the future.

You should always think about risks. Case in point, we've spotted 1 warning sign for Immunocore Holdings you should be aware of.

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).