Current annual revenue is ~$25M, with more than double-digit growth. If growth stalls and European sales cap out at $30M annually, and the US market only gets to $20M annually (2/3rd of Europe), that's about $25M annual profit at current 50% margin, with a current P/E of 54x. That's without any contribution from potential Australia and Japanese market and the paediatric market. Expensive, but not insane (NAN is trading about 130x,
If growth slows to 10% p.a., then in 5 years time Europe would be ~$40M revenues and if the US hits 2/3rd of that would be $25. Assuming a notional $5M from Australia and Japan and $10M from paediatrics puts it at $80M, $40M annual profit with a P/E of 33x (CSL trades at 34x)
So a reasonably conservative assumption puts it at a P/E in line with CSL in 5 years (assuming no share price growth until then). If CUV is able to keep their current rate of growth for even 1 or 2 more years before it slows, if they can get in to the paediatric market, variegate porphyria, an vitiglio, then the current SP will look cheap.
It's a gamble on continued growth (and primarily on FDA approval), but unless you're investing in Pfizer, just about every biotech stock is a gamble on growth.
Personally I think CUV is a little pricey, given the risk to the growth assumptions, but far from "no basis in reality" given that even conservative assumptions price it in line with other ASX biotech stocks.
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$15.59 |
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Mkt cap ! $780.7M |
Open | High | Low | Value | Volume |
$15.12 | $15.99 | $15.12 | $2.345M | 149.3K |
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No. | Vol. | Price($) |
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1 | 500 | $15.59 |
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Price($) | Vol. | No. |
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$15.66 | 92 | 1 |
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No. | Vol. | Price($) |
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1 | 500 | 15.290 |
1 | 198 | 15.110 |
1 | 100 | 15.000 |
2 | 1371 | 14.800 |
1 | 100 | 14.530 |
Price($) | Vol. | No. |
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15.700 | 200 | 1 |
15.850 | 500 | 1 |
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