WEBULL

Why Investors Shouldn't Be Surprised By BioLineRx Ltd.'s (TLV:BLRX) 29% Share Price Plunge

Simply Wall St · 07/09 04:04

The BioLineRx Ltd. (TLV:BLRX) share price has softened a substantial 29% over the previous 30 days, handing back much of the gains the stock has made lately. The recent drop completes a disastrous twelve months for shareholders, who are sitting on a 84% loss during that time.

After such a large drop in price, BioLineRx may be sending bullish signals at the moment with its price-to-sales (or "P/S") ratio of 0.8x, since almost half of all companies in the Biotechs industry in Israel have P/S ratios greater than 2.2x and even P/S higher than 24x are not unusual. Although, it's not wise to just take the P/S at face value as there may be an explanation why it's limited.

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.

See our latest analysis for BioLineRx

ps-multiple-vs-industry
TASE:BLRX Price to Sales Ratio vs Industry July 9th 2025

How BioLineRx Has Been Performing

With revenue growth that's superior to most other companies of late, BioLineRx has been doing relatively well. It might be that many expect the strong revenue performance to degrade substantially, which has repressed the share price, and thus the P/S ratio. If you like the company, you'd be hoping this isn't the case so that you could potentially pick up some stock while it's out of favour.

Want the full picture on analyst estimates for the company? Then our free report on BioLineRx will help you uncover what's on the horizon.

Do Revenue Forecasts Match The Low P/S Ratio?

In order to justify its P/S ratio, BioLineRx would need to produce sluggish growth that's trailing the industry.

If we review the last year of revenue growth, the company posted a terrific increase of 92%. Although, its longer-term performance hasn't been as strong with three-year revenue growth being relatively non-existent overall. Therefore, it's fair to say that revenue growth has been inconsistent recently for the company.

Looking ahead now, revenue is anticipated to slump, contracting by 19% per annum during the coming three years according to the three analysts following the company. Meanwhile, the broader industry is forecast to expand by 299% per year, which paints a poor picture.

With this in consideration, we find it intriguing that BioLineRx's P/S is closely matching its industry peers. However, shrinking revenues are unlikely to lead to a stable P/S over the longer term. There's potential for the P/S to fall to even lower levels if the company doesn't improve its top-line growth.

The Final Word

BioLineRx's P/S has taken a dip along with its share price. It's argued the price-to-sales ratio is an inferior measure of value within certain industries, but it can be a powerful business sentiment indicator.

As we suspected, our examination of BioLineRx's analyst forecasts revealed that its outlook for shrinking revenue is contributing to its low P/S. At this stage investors feel the potential for an improvement in revenue isn't great enough to justify a higher P/S ratio. Unless these conditions improve, they will continue to form a barrier for the share price around these levels.

Having said that, be aware BioLineRx is showing 6 warning signs in our investment analysis, and 3 of those are concerning.

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