Stanley Druckenmiller Has Bet Big on This 1 Healthcare Stock. Here's Why I Disagree.
2026-10-26 01:45
•Brett Schafer •The Motley Fool
•••••• ••• Axe Cap view
Why Natera’s Hype Doesn’t Play Well for JSE Investors
Natera’s sky-high valuation makes it a risky bet, even for top hedge fund managers.
Stanley Druckenmiller backing Natera sounds impressive—after all, 37.7% revenue growth is no joke. But a price-to-sales ratio north of 20 is a glaring red flag. Historically, the last time the P/S ratio climbed this high, the stock crashed some 70%. For South African investors watching USD/ZAR moves, this kind of volatility often means sudden rand weakness as people scramble out of risky USD positions. In contrast, local heavyweights like Aspen or Adcock Ingram offer exposure to healthcare without chasing frothy valuations. This is a classic case where growth stories excite, but fundamentals and valuations shouldn’t be ignored. The risk is the market re-prices aggressively if growth slows or profitability stumbles. I prefer to be cautious and sideline such expensive global innovators until the dust settles—especially when the rand tends to amplify shocks like this. this is just our opinion and not financial advice
Avoid Natera for now and consider local healthcare stocks like Aspen or Adcock Ingram for steadier exposure. Keep an eye on USD/ZAR as a risk indicator for offshore growth stocks.
- Natra (NTRA)
- USD/ZAR
- Aspen Pharmacare
- Adcock Ingram
- Natera’s revenue could continue surging, justifying the high valuation.
- Rand strength could limit downside for offshore investors.
7/10
Stanley Druckenmiller has made Natera his largest hedge fund position, betting on the company's disruptive blood-testing technology across prenatal screening, organ transplant monitoring, and cancer care. While Natera shows impressive 37.7% revenue growth and 1,000% growth over 10 years, the author argues the stock's P/S ratio of 21 is dangerously high compared to its long-term average, warning that following Druckenmiller at current valuations may not end well.
Our take is based on reporting first published by The Motley Fool.