Immune Design Corp (NASDAQ:IMDZ), a US$183.0m small-cap, is a healthcare company operating in an industry, which continues to be affected by the sustained economic uncertainty and structural trends, such as an aging population, impacting the sector globally. Healthcare analysts are forecasting for the entire industry, a relatively muted growth of 5.4% in the upcoming year , and a whopping growth of 54.5% over the next couple of years. This rate is larger than the growth rate of the US stock market as a whole. Today, I’ll take you through the sector growth expectations, and also determine whether Immune Design is a laggard or leader relative to its healthcare sector peers.
What’s the catalyst for Immune Design’s sector growth?
Data analytics is creating opportunities for innovations, however, stakeholders are challenged with the pressure of reducing costs. Over the past year, the industry saw growth in the thirties, beating the US market growth of 15.3%. Immune Design lags the pack with its sustained negative earnings over the past couple of years. The company’s outlook doesn’t seem to be much better given that analysts are forecasting continued unprofitability going forward. This lack of growth means Immune Design may be trading cheaper than its peers.
Is Immune Design and the sector relatively cheap?
The biotech industry is trading at a PE ratio of 26.36x, higher than the rest of the US stock market PE of 19.86x. This illustrates a somewhat overpriced sector compared to the rest of the market. However, the industry did return a higher 22.1% compared to the market’s 10.6%, which may be indicative of past tailwinds. Since Immune Design’s earnings doesn’t seem to reflect its true value, its PE ratio isn’t very useful. A loose alternative to gauge Immune Design’s value is to assume the stock should be relatively in-line with its industry.
Immune Design’s uncertain outlook is concerning for investors, with the prospect of negative earnings persisting into the future. If Immune Design has been on your watchlist for a while, now may not be the time to enter into the stock. However, before you make a decision on the stock, I suggest you look at Immune Design’s fundamentals in order to build a holistic investment thesis.
- Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
- Historical Track Record: What has IMDZ’s performance been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Immune Design? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at firstname.lastname@example.org.