Nurix Therapeutics (NRIX) stock moved after investors reacted to a new collaboration with Roche to co-develop and co-commercialize bexobrutideg for blood cancers and other conditions, supported by significant upfront and potential milestone payments.

The Roche collaboration comes at a time when Nurix Therapeutics has seen momentum build, with the latest 7 day share price return of 30.48% and a 1 year total shareholder return of 96.74% following a run to new 52 week highs.

If this kind of move has your attention, it could be a good moment to see what else is setting up in healthcare by scanning 39 healthcare AI stocks

With Nurix Therapeutics now trading near 52 week highs and analysts’ average price target sitting at $31.44 versus a last close of $22.90, investors have to ask: is there still upside here, or is the market already pricing in future growth?

Preferred Price-to-Sales of 33x: Is it justified?

With Nurix Therapeutics now valued at a P/S ratio of 33x, compared with a last close of $22.90, the market is clearly paying a rich multiple versus much of the biotech space.

The P/S ratio compares the company’s market value to its revenue and is often used for early stage or unprofitable biotech stocks where earnings are still negative. For Nurix Therapeutics, this is particularly relevant because the company reported revenue of $71.8 million alongside a net loss of $295.3 million, so traditional earnings based metrics like P/E are not meaningful.

On one hand, NRIX is described as expensive versus the broader US biotechs industry, which trades at an average P/S of 10.9x. On the other hand, it is described as good value against a closer peer group, where the average P/S sits at 35.3x. Relative to an estimated fair P/S of 0x, the current multiple looks very demanding. Those comparisons suggest the current valuation is high compared with the sector overall, even if it is more in line with companies that share similar characteristics.

Result: Price-to-Sales of 33x (OVERVALUED)

However, Nurix Therapeutics still faces key risks, including ongoing net losses of $295.3 million and heavy reliance on successful clinical outcomes for its early stage pipeline.

Next Steps

With sentiment around Nurix Therapeutics clearly mixed, with both risks and rewards in play, it makes sense to move quickly and test the numbers for yourself. To see how the positives stack up against the concerns in one place, review the 1 key reward and 2 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.