RE:Can anyone explain the $234 value on this $98 stock? Basically, it has a 9x forward P/E multiple because The Street believes that the revenue stream will die out and they won't be able to replace it (i.e. that Harvoni is a one-off and that they've stopped growing).
Until the company makes a truly accretive acquisition, or pops a winner or two out of the pipeline, my guess is the Street will continue to discount the potential.
Should see more dividend-requiring funds pour into this over time but I've personally moved on to greener pastures. I will hold shares for another decade, or until the fundamental story changes, but am trimming the rather large position that I've been holding since August. Made a decent return, thanks to buying up the dips, but this stock is broken. Love the company (mgmt, pipeline, etc.) -- and truly do believe that the market is wrong on this one -- but it may not get a 15x multiple for a while and this was a short-term play for me. Fairly safe long term hold, which is why I will continue on as a long for many years and may add a bit more later.
Check out Seeking Alpha for several insightful analyses if you're interested in learning more. DoctorRx and Brett Jensen have done decent jobs in outlining the story.