Biotechnology company BioNTech SE is taking Wall Street by surprise today, falling to $101.81 and marking a -4.3% change compared to the S&P 500, which moved -0.0%. BNTX is -20.97% below its average analyst target price of $128.82, which implies there is more upside for the stock.
As such, the average analyst rates it at buy. Over the last year, BioNTech SE has underperfomed the S&P 500 by -25.9%, moving 4.0%.
BioNTech SE, a biotechnology company, develops and commercializes immunotherapies for cancer and other infectious diseases. The company is part of the healthcare sector. Healthcare companies work in incredibly complex markets, and their valuations can change in an instant based on a denied drug approval, a research and development breakthrough at a competitor, or a new government regulation. In the longer term, healthcare companies are affected by factors as varied as demographics and epidemiology. Investors who want to understand the healthcare market should be prepared for deep dives into a wide range of topics.
BioNTech SE does not publish either its forward or trailing P/E ratios because their values are negative -- meaning that each share of stock represents a net earnings loss. But we can calculate these P/E ratios anyways using the stocks forward and trailing (EPS) values of $-3.9 and $-2.05. We can see that BNTX has a forward P/E ratio of -26.1 and a trailing P/E ratio of -49.7. As of the third quarter of 2024, the average Price to Earnings (P/E) ratio for US health care companies is 26.07, and the S&P 500 has an average of 29.3. The P/E ratio consists in the stock's share price divided by its earnings per share (EPS), representing how much investors are willing to spend for each dollar of the company's earnings. Earnings are the company's revenues minus the cost of goods sold, overhead, and taxes.
To deepen our understanding of the company's finances, we should study the effect of its depreciation and capital expenditures on the company's bottom line. We can see the effect of these additional factors in BioNTech SE's free cash flow, which was $5.37 Billion as of its most recent annual report. This represents the amount of money that is available for reinvesting in the business, or for paying out to investors in the form of a dividend. With its strong cash flows, BNTX is in a position to do either -- which can encourage more investors to place their capital in the company. Over the last four years, the company's free cash flow has been growing at a rate of 147.2% and has on average been $3.26 Billion.
Value investors often analyze stocks through the lens of its Price to Book (P/B) Ratio (its share price divided by its book value). The book value refers to the present value of the company if the company were to sell off all of its assets and pay all of its debts today - a number whose value may differ significantly depending on the accounting method. Biontech se's P/B ratio indicates that the market value of the company exceeds its book value by a factor of 1.28, but is still below the average P/B ratio of the Health Care sector, which stood at 3.53 as of the third quarter of 2024.
BioNTech SE is likely undervalued at today's prices because it has a negative P/E ratio., a lower P/B ratio than its sector average, and generally positive cash flows with an upwards trend. The stock has poor growth indicators because of its weak operating margins with a positive growth rate, and no PEG ratio. We hope this preliminary analysis will encourage you to do your own research into BNTX's fundamental values -- especially their trends over the last few years, which provide the clearest picture of the company's valuation.
