Chart out the growth rate sometime, revenue and profit. Keep in mind that they have 3 year deals with their customers, with royalties and milestone payments from product development events. If you look at P/E much, you are a stranger to biotech, the fact that INCY is a biotech and even has a PE says a lot, most are negative. Check out the R&D deals, the potentially huge value of the EST patents and other sequence patents, diaDexus diagnostics potential, the business model of non-exclusive deals lending itself to a consortium approach, the one stop genomics platform company, the continuous incremental improvement approach to how they sequence better and faster, that this is not just a biotech, but also a software company, the ever expanding product line, never lost a customer yet......... If you believe that the growth can continue at a similar rate, and that the market isn't tapped yet (and I don't think the surface has hardly been scratched), then you can explain off the PE by the growth rate.
If you believe in genomics and that it is the power of the next era of medicine and science, then you want some INCY in your portfolio. But, Hey, I'm biased: DO YOUR OWN DUE DILIGENCE!!!
Rman |
