What does P/S of 3.3 mean? Don't just write that and go to university. Is that good? Is it bad? Comparative values?
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@Joris Ratio of share price to sales
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@Joris It is often not so easy to determine meaningful comparative values!
As a rule, the industry average is used here. Alternatively, the average of the competition. However, this is difficult because competitors are often in different locations. Especially with pharma:
- Research start-ups
- growth company
- Profitable growth company
- high/small margins
As you can see, there are many ways to determine this!
Theoretically, you can take the multiple of a generics manufacturer. But here again: not quite the same. Hims has an attractive brand and its own platform. As a result, you can expect significantly higher margins in the long term (once the company has grown).
As a rule, the industry average is used here. Alternatively, the average of the competition. However, this is difficult because competitors are often in different locations. Especially with pharma:
- Research start-ups
- growth company
- Profitable growth company
- high/small margins
As you can see, there are many ways to determine this!
Theoretically, you can take the multiple of a generics manufacturer. But here again: not quite the same. Hims has an attractive brand and its own platform. As a result, you can expect significantly higher margins in the long term (once the company has grown).
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