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    Emergent BioSolutions Inc. (NYSE:EBS) Surges 28% Yet Its Low P/S Is No Reason For Excitement

    Simply Wall St·12/23/2025 10:27:17
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    Despite an already strong run, Emergent BioSolutions Inc. (NYSE:EBS) shares have been powering on, with a gain of 28% in the last thirty days. Looking back a bit further, it's encouraging to see the stock is up 57% in the last year.

    Although its price has surged higher, Emergent BioSolutions' price-to-sales (or "P/S") ratio of 0.9x might still make it look like a strong buy right now compared to the wider Biotechs industry in the United States, where around half of the companies have P/S ratios above 12.5x and even P/S above 89x are quite common. Although, it's not wise to just take the P/S at face value as there may be an explanation why it's so limited.

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    See our latest analysis for Emergent BioSolutions

    ps-multiple-vs-industry
    NYSE:EBS Price to Sales Ratio vs Industry December 23rd 2025

    How Has Emergent BioSolutions Performed Recently?

    Emergent BioSolutions hasn't been tracking well recently as its declining revenue compares poorly to other companies, which have seen some growth in their revenues on average. It seems that many are expecting the poor revenue performance to persist, which has repressed the P/S ratio. So while you could say the stock is cheap, investors will be looking for improvement before they see it as good value.

    Keen to find out how analysts think Emergent BioSolutions' future stacks up against the industry? In that case, our free report is a great place to start.

    How Is Emergent BioSolutions' Revenue Growth Trending?

    In order to justify its P/S ratio, Emergent BioSolutions would need to produce anemic growth that's substantially trailing the industry.

    In reviewing the last year of financials, we were disheartened to see the company's revenues fell to the tune of 30%. As a result, revenue from three years ago have also fallen 47% overall. Accordingly, shareholders would have felt downbeat about the medium-term rates of revenue growth.

    Looking ahead now, revenue is anticipated to climb by 35% during the coming year according to the dual analysts following the company. With the industry predicted to deliver 48% growth, the company is positioned for a weaker revenue result.

    With this in consideration, its clear as to why Emergent BioSolutions' P/S is falling short industry peers. Apparently many shareholders weren't comfortable holding on while the company is potentially eyeing a less prosperous future.

    The Final Word

    Shares in Emergent BioSolutions have risen appreciably however, its P/S is still subdued. Generally, our preference is to limit the use of the price-to-sales ratio to establishing what the market thinks about the overall health of a company.

    As we suspected, our examination of Emergent BioSolutions' analyst forecasts revealed that its inferior revenue outlook 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. The company will need a change of fortune to justify the P/S rising higher in the future.

    We don't want to rain on the parade too much, but we did also find 3 warning signs for Emergent BioSolutions (1 makes us a bit uncomfortable!) that you need to be mindful of.

    It's important to make sure you look for a great company, not just the first idea you come across. So if growing profitability aligns with your idea of a great company, take a peek at this free list of interesting companies with strong recent earnings growth (and a low P/E).