Kuros Biosciences AG (VTX:KURN), a CHF57.0m small-cap, operates in the healthcare industry, which has experienced tailwinds from issues such as higher demand driven by an aging population and the increasing prevalence of diseases and comorbidities. Healthcare analysts are forecasting for the entire industry, a strong double-digit growth of 12.4% in the upcoming year , and a massive growth of 30.8% over the next couple of years. However this rate still came in below the growth rate of the CH stock market as a whole. Today, I’ll take you through the sector growth expectations, as well as evaluate whether Kuros Biosciences is lagging or leading in the industry.
View our latest analysis for Kuros Biosciences
What’s the catalyst for Kuros Biosciences’s sector growth?
Data analytics is creating opportunities for innovations, however, stakeholders are challenged with the pressure of reducing costs. In the past year, the industry delivered growth in the twenties, beating the CH market growth of 10.3%. Kuros Biosciences lags the pack with its negative growth rate of -9.7% over the past year, which indicates the company has been growing at a slower pace than its biotech peers. Moreover, the trend of below-industry growth rate is expected to continue in the future with Kuros Biosciences poised to deliver a -6.5% growth compared to the industry average growth rate of 12.4%. As an industry laggard, Kuros Biosciences may be a cheaper stock relative to its peers.
Is Kuros Biosciences and the sector relatively cheap?
The biotech sector’s PE is currently hovering around 34.64x, higher than the rest of the CH stock market PE of 20.72x. This illustrates a somewhat overpriced sector compared to the rest of the market. However, the industry did return a higher 14.6% compared to the market’s 10.7%, which may be indicative of past tailwinds. Since Kuros Biosciences’s earnings doesn’t seem to reflect its true value, its PE ratio isn’t very useful. A loose alternative to gauge Kuros Biosciences’s value is to assume the stock should be relatively in-line with its industry.
Next Steps:
Kuros Biosciences is a biotech industry laggard in terms of its future growth outlook. If Kuros Biosciences has been on your watchlist for a while, now may be a good time to dig deeper into the stock. Although its growth is expected to be lower than its healthcare peers in the near term, the market may be pessimistic on the stock, leading to a potential undervaluation. However, before you make a decision on the stock, I suggest you look at Kuros Biosciences’s fundamentals in order to build a holistic investment thesis.