Thinking about buying, but wanted to ask opinion's from existing owners. What is your take on current price for this stock. I plan to investigate further, but at a quick glance they list total equity at 3.3 billion, but I think it's a bit of a surprise upon further investigation that they list 3.2 billion of that as Good-will and intangibles. According to what I've read they have had declining income for the last 2 quarters and are selling at almost 30 times earnings. What factors are supporting the price at this level?
GAAP financials mask true profitability. Look at script growth and EBITDA per script. The reason the valuation is expanding is because the NextRx acquisition is going to be a huge driver of earnings growth and by the time its integrated the biggest year ever for patent expirations will be upon us. they are going to go from earning under $4 this year to around $7.5 by 2012. What other large cap has that kind of earnings ramp ahead of it?
Thank you, those are some strong supporting points for the price. Does it make you a little leery that the current price is so high that even if it doubled it's earnings the p/e ratio would still be higher than many large caps with 20+ years of steady dividend records and massively larger book values? (example HON) I just wonder if recent price action has made put ESRX in a position to where it would have to meet the loftiest expectations to even be fairly valued compared to many other large caps.