Here's Why We're Not Too Worried About Biotron's (ASX:BIT) Cash Burn Situation
We can readily understand why investors are attracted to unprofitable companies. For example, although Amazon.com made...
Has the Australian Healthcare Sector valuation changed over the past few years?
|Tue, 30 Nov 2021||AU$239.5b||AU$56.1b||AU$4.7b||30.4x|
|Thu, 28 Oct 2021||AU$234.5b||AU$55.2b||AU$4.5b||30.2x|
|Sat, 25 Sep 2021||AU$241.4b||AU$55.6b||AU$4.6b||30.8x|
|Mon, 23 Aug 2021||AU$238.6b||AU$55.1b||AU$4.5b||29.6x|
|Sat, 10 Jul 2021||AU$226.8b||AU$55.1b||AU$4.5b||30.7x|
|Fri, 02 Apr 2021||AU$208.7b||AU$52.5b||AU$3.8b||23.1x|
|Mon, 04 Jan 2021||AU$211.4b||AU$50.7b||AU$3.1b||31.9x|
|Thu, 08 Oct 2020||AU$210.2b||AU$50.3b||AU$2.8b||30.5x|
|Wed, 01 Jul 2020||AU$204.0b||AU$49.6b||AU$2.5b||27.4x|
|Sat, 04 Apr 2020||AU$192.9b||AU$51.5b||AU$3.5b||20.6x|
|Tue, 07 Jan 2020||AU$197.2b||AU$49.6b||AU$3.7b||21.4x|
|Mon, 30 Sep 2019||AU$175.7b||AU$49.4b||AU$3.8b||20.6x|
|Thu, 04 Jul 2019||AU$164.3b||AU$47.7b||AU$3.6b||22.3x|
|Sun, 07 Apr 2019||AU$146.2b||AU$46.5b||AU$3.5b||21.4x|
|Wed, 09 Jan 2019||AU$136.4b||AU$45.3b||AU$3.4b||22.9x|
Current Industry PE: Investors are relatively neutral on the industry at the moment, considering it's trading close to its 3-year average PE ratio of 25.7x. It appears they believe that earnings will grow in-line with historical growth rates.
Past Earnings Growth: The earnings for companies in the Healthcare industry have grown 12% per year over the last three years, and revenues for these companies have grown 8.4% per year. This means that more sales are being generated by these companies overall, and subsequently their profits are increasing too.
Which industries have driven the changes within the Australian Healthcare sector?
Industry PE: Investors are most optimistic about the Healthtech industry, which is trading close to its 3-year average PE ratio of 123x. However analysts expect its future annual earnings growth (36%) to be largely in line with prior year's earnings growth, so the market might believe analysts are underestimating its future growth since investors are willing to pay a bigger premium today. Meanwhile, investors are most pessimistic about the Medical Equipment industry, which is trading below its 3-year average of 32.2x.
Forecasted Growth: Analysts are most optimistic on the Pharma industry, expecting annual earnings growth of 67% over the next 5 years. This is better than it's past earnings growth rate of 5.6% per year. Meanwhile, the Healthcare Services industry is expected to see its earnings growth to stay flat over the next few years.
Mayne Pharma Group
Ramsay Health Care