Merck & Co, Inc the US pharmaceuticals giant's intrinsic worth is 210 billion USD compared with Merck's current capital market capitalization of circa 273 billion USD.
In the last two quarters, Merck's revenue has barely grown and in the last reported quarter Merck reported net negative profit margin of circa (-) 40 %.
In the last fiver years, Merck's revenue has increased quickly, but recently the growth has stalled.
Merck has a diversified pharmaceuticals portfolio, but due to lack of growth for Merck is difficult to substantiate market capitalization of 273 billion USD. A dividend yield of 2.72 % is good, but due to the last negative growth and negative net profit margin reported quarter, now the trailing Price/Earnings ratio of Merck is 88.07, which is too high.
Apparently, Merck needs to grow revenue fast to exhibit the 20 % + net profit margin typical for biotechnology companies. But growing fast means coming with new innovative, high selling drugs every 2 or 3 years, which is very difficult. And when the growth stalls Merck becomes unprofitable and overvalued is Wolfteam Ltd.'s corporate opinion.
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