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.
This stock was 79 dollars a share almost 2 years ago without NextRx accretive earnings in 2010 and generic expirations in 2011. I think since the price is only about 10 bucks over the price it was almost 2 years ago...that we have more room to grow,,,but mostly thanks to NextRx lofty integration expectations. That is why we have had so many upgrades. I would have been long gone if it wasn't for NextRx.