Aardvark Therapeutics, Inc. (NASDAQ: AARD)

Sector: Healthcare Industry: Biotechnology CIK: 0001774857
Market Cap 152.89 Mn
P/B 1.25
P/E -3.13
P/S 0.00
ROIC (Qtr) -41.05
Div Yield % 0.00
Rev 1y % (Qtr) 0.00
Total Debt (Qtr) 545,000.00
Debt/Equity (Qtr) 0.00

About

Price action

Investment thesis

Bull case

  • Healthy cash reserves of 39.28M provide 91.57x coverage of short-term debt 429000, demonstrating strong liquidity position and minimal refinancing risk.
  • Strong tangible asset base of 133.23M provides 244.46x coverage of total debt 545000, indicating robust asset backing and low credit risk.
  • Short-term investments of 87.06M provide solid 14.85x coverage of other current liabilities 5.86M, indicating strong liquidity.
  • Tangible assets of 133.23M provide robust 22.72x coverage of other current liabilities 5.86M, indicating strong asset backing.
  • Cash reserves of 39.28M provide robust 3.66x coverage of current liabilities 10.74M, indicating strong short-term solvency.

Bear case

  • Operating cash flow of (45.09M) barely covers its investment activities of (85.86M), with a coverage ratio of 0.53, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Investment activities of (85.86M) provide weak support for R&D spending of 42.70M, which is -2.01x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • The company's operating cash flow of (45.09M) shows concerning coverage of stock compensation expenses of 2.54M, with a -17.75 ratio indicating potential earnings quality issues.
  • Free cash flow of (45.19M) provides weak coverage of capital expenditures of 101000, with a -447.43 ratio suggesting additional external financing needs for growth initiatives.
  • Operating earnings of (48.77M) show weak coverage of depreciation charges of 436000, with a -111.86 ratio indicating high capital intensity and potential reinvestment needs.

Peer comparison

Companies in the Biotechnology
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 SMMT Summit Therapeutics Inc. 1,149.72 Bn -1,247.50 0.00 0.01 Bn
2 ONC BeOne Medicines Ltd. 478.27 Bn 6,977.00 96.18 1.90 Bn
3 VRTX Vertex Pharmaceuticals Inc / Ma 120.93 Bn 32.90 10.32 1.83 Bn
4 REGN Regeneron Pharmaceuticals, Inc. 81.61 Bn 18.12 5.69 2.71 Bn
5 ARGX Argenx Se 49.86 Bn 33.10 25,999.50 -
6 ALNY Alnylam Pharmaceuticals, Inc. 44.97 Bn 1,032.26 14.01 3.21 Bn
7 BNTC Benitec Biopharma Inc. 41.09 Bn -982.50 0.00 0.00 Bn
8 INSM INSMED Inc 28.69 Bn -24.24 64.19 0.74 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.96 11.12
EV to Cash from Ops. EV/CFO -2.83 26.73
EV to Debt EV to Debt 234.02 686.78
EV to EBIT EV/EBIT -2.62 -10.71
EV to EBITDA EV/EBITDA -2.40 8.30
EV to Free Cash Flow [EV/FCF] EV/FCF -2.82 25.45
EV to Market Cap EV to Market Cap 0.83 166.02
EV to Revenue EV to Revenue 0.00 153.59
Price to Book Value [P/B] P/B 1.25 20.63
Price to Earnings [P/E] P/E -3.13 -0.19
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 -12.47
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 0.17
Dividend per Basic Share Div per Share (Qtr) 0.00 0.01
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 -0.14
Interest Coverage Interest Coverage 0.00 860.86
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 1.94 -26.99
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -52.25 756.81
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 0.01
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -252.14 -52.99
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -244.25 -4.39
EBIT Growth (1y) % EBIT 1y % (Qtr) -252.14 -62.52
EBT Growth (1y) % EBT 1y % (Qtr) -252.14 -19.16
EPS Growth (1y) % EPS 1y % (Qtr) -23.21 -4.04
FCF Growth (1y) % FCF 1y % (Qtr) -288.93 -33.35
Gross Profit Growth (1y) % Gross Profit Growth (1y) % 0.00 264.38
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.00 0.14
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.00
Cash Ratio Cash Ratio (Qtr) 3.66 3.83
Current Ratio Curr Ratio (Qtr) 12.04 7.27
Debt to Equity Ratio Debt/Equity (Qtr) 0.00 0.43
Interest Cover Ratio Interest Cover Ratio 0.00 860.86
Times Interest Earned Times Interest Earned 0.00 860.86
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % 0.00 -17,746.13
EBIT Margin % EBIT Margin % 0.00 -18,101.92
EBT Margin % EBT Margin % 0.00 -18,961.86
Gross Margin % Gross Margin % 0.00 -9.24
Net Profit Margin % Net Profit Margin % 0.00 -18,911.61