ImmunityBio (IBRX) is under close watch after an FDA warning letter on allegedly misleading promotional claims for Anktiva and a series of class action lawsuits, even as the company reports recent revenue and global approval figures.

After touching a 1 day share price return of negative 7.4% following the FDA warning letter and class action headlines, ImmunityBio still sits at US$7.76 with a year to date share price return of 284.16% and a 1 year total shareholder return of 271.29%. However, the 5 year total shareholder return of negative 46.33% highlights how long term holders have had a very different experience from recent buyers.

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With the share price already up sharply this year, a large reported loss, rapid revenue growth from Anktiva, and legal plus regulatory clouds now in play, is ImmunityBio still mispriced, or is the market already baking in future growth?

Most Popular Narrative: 42.5% Undervalued

ImmunityBio's most followed narrative pegs fair value at $13.50, well above the last close at $7.76, which sets up a very different story from the recent sell off.

The rapid global expansion of ANKTIVA into 33 countries, including the U.S., EU, U.K., and Saudi Arabia, together with commercial partners like Accord and regional distributors, sets up a much larger treated patient base over time, which is directly tied to future product revenue growth.

Curious what has to happen financially to support that gap between price and fair value? The narrative leans on rapid top line growth, rising margins and a much higher earnings base than today. The full set of assumptions shows how those pieces are expected to fit together.

Result: Fair Value of $13.50 (UNDERVALUED)

However, this story can change quickly if ANKTIVA adoption slows across those 33 countries, or if regulators limit approvals beyond the current bladder cancer setting.

Next Steps

With mixed reactions around ImmunityBio's outlook, now is a good time to move quickly and review the data for yourself, carefully weighing the 2 key rewards and 3 important warning signs.

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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.