Alector, Inc. (NASDAQ: ALEC)

Sector: Healthcare Industry: Biotechnology CIK: 0001653087
Market Cap 179.90 Mn
P/B 3.12
P/E -1.67
P/S 2.61
ROIC (Qtr) -119.94
Div Yield % 0.00
Rev 1y % (Qtr) -78.75
Total Debt (Qtr) 37.88 Mn
Debt/Equity (Qtr) 0.66

About

Alector, Inc., a clinical-stage biotechnology company, is dedicated to developing therapies that leverage the immune system to cure neurodegenerative diseases. The company's mission is to empower the immune system to cure neurodegeneration and other diseases, with a focus on immuno-neurology, which targets immune dysfunction as a root cause of multiple pathologies that drive degenerative brain disorders. Alector is listed on the NASDAQ stock exchange under the symbol "ALEC" and operates within the biotechnology industry. Alector's primary business...

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Price action

Investment thesis

Bull case

  • Healthy cash reserves of 78.35M provide 8.73x coverage of short-term debt 8.98M, demonstrating strong liquidity position and minimal refinancing risk.
  • Strong tangible asset base of 335.29M provides 8.85x coverage of total debt 37.88M, indicating robust asset backing and low credit risk.
  • Operating cash flow of (197.37M) fully covers other non-current liabilities (10.30M) by 19.16x, showing strong long-term stability.
  • Short-term investments of 214.60M provide solid 3.87x coverage of other current liabilities 55.44M, indicating strong liquidity.
  • Tangible assets of 335.29M provide robust 6.05x coverage of other current liabilities 55.44M, indicating strong asset backing.

Bear case

  • Operating cash flow of (197.37M) barely covers its investment activities of 212.40M, with a coverage ratio of -0.93, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of (197.37M) provides insufficient coverage of deferred revenue obligations of 179.01M, which is -1.10x, raising concerns about future service delivery capabilities.
  • The company's operating cash flow of (197.37M) shows concerning coverage of stock compensation expenses of 32.03M, with a -6.16 ratio indicating potential earnings quality issues.
  • Free cash flow of (197.58M) provides weak coverage of capital expenditures of 214000, with a -923.28 ratio suggesting additional external financing needs for growth initiatives.
  • Operating cash flow of (197.37M) provides minimal -4111.83x coverage of tax expenses of 48000, suggesting potential tax planning inefficiencies or unsustainable tax positions.

Peer comparison

Companies in the Biotechnology
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 SMMT Summit Therapeutics Inc. 1,446.17 Bn -1,569.17 0.00 0.01 Bn
2 ONC BeOne Medicines Ltd. 439.23 Bn 6,407.40 88.33 1.90 Bn
3 VRTX Vertex Pharmaceuticals Inc / Ma 120.62 Bn 32.82 10.29 1.83 Bn
4 REGN Regeneron Pharmaceuticals, Inc. 84.40 Bn 18.44 5.92 2.71 Bn
5 ALNY Alnylam Pharmaceuticals, Inc. 56.13 Bn 1,288.39 17.49 3.21 Bn
6 ARGX Argenx Se 47.89 Bn 31.79 24,973.95 -
7 BNTC Benitec Biopharma Inc. 42.45 Bn -1,015.00 0.00 0.00 Bn
8 INSM INSMED Inc 32.67 Bn -27.60 73.08 0.74 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.52 12.96
EV to Cash from Ops. EV/CFO -0.88 23.73
EV to Debt EV to Debt 4.56 772.65
EV to EBIT EV/EBIT -1.60 -11.30
EV to EBITDA EV/EBITDA -1.51 7.11
EV to Free Cash Flow [EV/FCF] EV/FCF -0.87 22.12
EV to Market Cap EV to Market Cap 0.96 68.89
EV to Revenue EV/Rev 2.50 199.70
Price to Book Value [P/B] P/B 3.12 22.62
Price to Earnings [P/E] P/E -1.67 -12.30
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 -12.02
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 -0.15
Interest Coverage Interest Coverage 0.00 857.11
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 83.73 -27.24
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 102.43 747.06
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 0.01
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 31.99 -48.21
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 35.17 -2.09
EBIT Growth (1y) % EBIT 1y % (Qtr) 31.26 -57.79
EBT Growth (1y) % EBT 1y % (Qtr) 31.26 -14.35
EPS Growth (1y) % EPS 1y % (Qtr) 37.65 -30.88
FCF Growth (1y) % FCF 1y % (Qtr) 11.10 -32.51
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 12.26 227.96
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.21 0.14
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.00
Cash Ratio Cash Ratio (Qtr) 0.98 3.79
Current Ratio Curr Ratio (Qtr) 3.76 7.23
Debt to Equity Ratio Debt/Equity (Qtr) 0.66 0.42
Interest Cover Ratio Interest Cover Ratio 0.00 857.11
Times Interest Earned Times Interest Earned 0.00 857.11
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) -142.20 -18,509.94
EBIT Margin % EBIT Margin % (Qtr) -155.96 -18,862.18
EBT Margin % EBT Margin % (Qtr) -155.96 -19,783.19
Gross Margin % Gross Margin % (Qtr) 100.00 -8.62
Net Profit Margin % Net Margin % (Qtr) -156.00 -19,732.60