Is Vertex Pharmaceuticals Stock Too Expensive With a Price-to-Sales Ratio of 11x?
I've been a big fan of Vertex Pharmaceuticals (NASDAQ: VRTX), and the biotech stock has made me a lot of money throughout the years. Vertex continues to enjoy a virtual monopoly in treating cystic fibrosis (CF) but it's advancing multiple promising programs in its pipeline.
However, investors who watch valuation metrics closely might have noticed something concerning about Vertex: Its shares trade at a price-to-sales (P/S) ratio of over 11x. Is Vertex stock too expensive right now?
Let's acknowledge right out of the gate that a P/S multiple of more than 11x is usually viewed as sky-high. For example, the S 500 currently trades at only 2.72x sales. However, it's not a great approach to compare the valuations of biopharmaceutical stocks with those of other industries because the dynamics shaping their respective markets are very different.
Source Fool.com
Vertex Pharmaceuticals Inc. Stock
With 43 Buy predictions and 2 Sell predictions Vertex Pharmaceuticals Inc. is one of the favorites of our community.
However, we have a potential of -1.19% for Vertex Pharmaceuticals Inc. as the target price of 386 € is below the current price of 390.65 €.
