Why Is Travere Therapeutics (TVTX) Rated as Buy?

Travere Therapeutics may be overvalued with poor growth indicators, but the 12 analysts following the company give it an average rating of buy. The analysts have set target prices ranging from $17.0 to $43.0 per share, for an average of $34.0. At today's price of $16.52, Travere Therapeutics is trading -51.4% away from its average target price, suggesting there is an analyst consensus of strong upside potential.

Travere Therapeutics, Inc., a biopharmaceutical company, focuses on the identification, development, commercialization, and delivering of therapies for the treatment of rare diseases. Based in San Diego, CA, the small-cap Health Care company has 462 full time employees. Travere Therapeutics has not offered a dividend during the last year.

Travere Therapeutics does not have a meaningful trailing P/E ratio since its earnings per share are negative. Its forward EPS guidance is negative too, at -3.08. The average P/E ratio for the Health Care sector is 24.45. Furthermore, Travere Therapeutics is likely overvalued compared to its book value, since its P/B ratio of 24.8 is higher than the sector average of 4.16.

If analysts are willing to give the company a decent rating despite its valuation issues, its likely that they put significant weight behind Travere Therapeutics's growth potential, as signaled by its 4.9% rate of revenue growth and capital expenditures that are growing at 16.4% on average each year.