Delcath Systems, Inc. (NASDAQ: DCTH)

Sector: Healthcare Industry: Medical Devices CIK: 0000872912
Market Cap 281.53 Mn
P/B 2.45
P/E 235.00
P/S 3.54
ROIC (Qtr) 11.68
Div Yield % 0.00
Rev 1y % (Qtr) 83.60
Total Debt (Qtr) 965,000.00
Debt/Equity (Qtr) 0.01
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About

Delcath Systems, Inc., a Delaware corporation (DCTH), operates in the biopharmaceutical industry, specializing in the development and commercialization of liver-directed therapies for the treatment of patients with liver metastases. The company's primary business activities revolve around its lead product, the HEPZATOTM KIT, and the CHEMOSAT Hepatic Delivery System. These products are designed to administer high-dose chemotherapy directly into the liver while limiting systemic exposure and associated side effects. The HEPZATO segment, a key division...

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Investment thesis

Bull case

  • Strong operating cash flow of 13.26M provides robust 13.74x coverage of total debt 965000, indicating excellent debt servicing capability and financial flexibility.
  • Healthy cash reserves of 41.81M provide 380.12x coverage of short-term debt 110000, demonstrating strong liquidity position and minimal refinancing risk.
  • Strong tangible asset base of 124.30M provides 128.80x coverage of total debt 965000, indicating robust asset backing and low credit risk.
  • Robust free cash flow of 12.04M exceeds capital expenditure of 1.23M by 9.82x, indicating strong organic growth funding capability.
  • Short-term investments of 47.10M provide solid 8.17x coverage of other current liabilities 5.77M, indicating strong liquidity.

Bear case

  • Operating cash flow of 13.26M barely covers its investment activities of (41.26M), with a coverage ratio of -0.32, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Investment activities of (41.26M) provide weak support for R&D spending of 22.79M, which is -1.81x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • The company's operating cash flow of 13.26M shows concerning coverage of stock compensation expenses of 21.33M, with a 0.62 ratio indicating potential earnings quality issues.
  • Operating earnings of (912000) show weak coverage of depreciation charges of 309000, with a -2.95 ratio indicating high capital intensity and potential reinvestment needs.
  • Retained earnings of (526.95M) provide limited buffer against comprehensive income items of 875000, which is -602.23x, indicating elevated exposure to market risks.

Peer comparison

Companies in the Medical Devices
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 ABT Abbott Laboratories 173.80 Bn 32.73 5.47 12.94 Bn
2 SYK Stryker Corp 141.15 Bn 43.48 5.62 15.86 Bn
3 MDT Medtronic plc 123.47 Bn 25.92 3.55 29.10 Bn
4 BSX Boston Scientific Corp 112.80 Bn 38.92 5.62 11.44 Bn
5 EW Edwards Lifesciences Corp 45.66 Bn 33.38 7.76 0.70 Bn
6 DXCM Dexcom Inc 27.52 Bn 32.91 5.90 1.34 Bn
7 STE STERIS plc 24.13 Bn 34.08 4.14 2.05 Bn
8 PODD Insulet Corp 17.33 Bn 70.38 6.87 1.01 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 2.00 2.13
EV to Cash from Ops. EV/CFO 18.71 2.75
EV to Debt EV to Debt 257.10 17.25
EV to EBIT EV/EBIT -272.04 2.89
EV to EBITDA EV/EBITDA 40.26 4.53
EV to Free Cash Flow [EV/FCF] EV/FCF 20.61 29.36
EV to Market Cap EV to Market Cap 0.88 25.09
EV to Revenue EV/Rev 3.12 32.80
Price to Book Value [P/B] P/B 2.45 4.73
Price to Earnings [P/E] P/E 235.00 -2.04
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 0.00 40.22
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 1.59
Dividend per Basic Share Div per Share (Qtr) 0.00 0.10
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 -0.37
Interest Coverage Int. cover (Qtr) 0.39 196.93
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -251.29 -152.08
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 402.86 8,476.58
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 -0.44
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 97.78 -792.16
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 123.16 3.79
EBIT Growth (1y) % EBIT 1y % (Qtr) 97.32 -301.80
EBT Growth (1y) % EBT 1y % (Qtr) 104.24 -121.44
EPS Growth (1y) % EPS 1y % (Qtr) 103.33 -87.51
FCF Growth (1y) % FCF 1y % (Qtr) 145.94 10.43
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 273.09 38.21
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.64 0.55
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.02
Cash Ratio Cash Ratio (Qtr) 5.22 1.80
Current Ratio Curr Ratio (Qtr) 15.06 4.18
Debt to Equity Ratio Debt/Equity (Qtr) 0.01 1.20
Interest Cover Ratio Int Coverage (Qtr) 0.39 196.93
Times Interest Earned Times Interest Earned (Qtr) 0.39 196.93
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) -0.80 -2,396.63
EBIT Margin % EBIT Margin % (Qtr) -1.15 -2,478.60
EBT Margin % EBT Margin % (Qtr) 1.82 -2,690.42
Gross Margin % Gross Margin % (Qtr) 86.30 30.80
Net Profit Margin % Net Margin % (Qtr) 1.50 -2,821.53