Magic Scissors' stock price is currently trading at $90.74 and its most recent reported Earnings Per Share is $3.25. The S&P Biotech Sector which Magic Scissors belongs to is trading at a Price to earnings (P/E) multiple of 25.17.

Based on the S&P Biotech Sector P/E multiple, what should Magic Scissors stock price be trading at? Show your calculations.

Vincent analyzed a few other Biotech companies, and noticed that compared to the sector average P/E ratio (S&P Biotech P/E ratios), some of the Biotech companies he analyzed had lower P/E ratios and others have higher.

Provide one reason why some companies have higher P/E ratios than the sector average