Denali Therapeutics Inc. (NASDAQ: DNLI)

Sector: Healthcare Industry: Biotechnology CIK: 0001714899
Market Cap 2.92 Bn
P/B 3.15
P/E -5.85
P/S 0.00
ROIC (Qtr) -53.60
Div Yield % 0.00
Rev 1y % (Qtr) 0.00
Total Debt (Qtr) 44.40 Mn
Debt/Equity (Qtr) 0.05

About

Denali Therapeutics Inc., often recognized by its ticker symbol DNLI, operates in the biopharmaceutical industry with a specific focus on developing therapies for neurodegenerative diseases and lysosomal storage disorders (LSDs). The company's mission is to discover, develop, and deliver therapeutics that defeat degeneration. Denali boasts a diverse portfolio of both small molecule and biotherapeutic medicines, comprising seven product candidates in clinical development across seven indications, and more than a dozen preclinical therapeutic candidates. The...

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Price action

Investment thesis

Bull case

  • Healthy cash reserves of 90.96M provide 9.93x coverage of short-term debt 9.16M, demonstrating strong liquidity position and minimal refinancing risk.
  • Strong tangible asset base of 1.06B provides 23.77x coverage of total debt 44.40M, indicating robust asset backing and low credit risk.
  • Short-term investments of 757.24M provide solid 10.20x coverage of other current liabilities 74.24M, indicating strong liquidity.
  • Long-term investments of 24.70M provide solid 0.70x coverage of long-term debt 35.24M, indicating strategic financial planning.
  • Tangible assets of 1.06B provide robust 14.22x coverage of other current liabilities 74.24M, indicating strong asset backing.

Bear case

  • Operating cash flow of (397.78M) barely covers its investment activities of 406.72M, with a coverage ratio of -0.98, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Investment activities of 406.72M provide weak support for R&D spending of 420.66M, which is 0.97x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • Short-term investments of 757.24M significantly exceed cash reserves of 90.96M, which is 8.32x, indicating potentially excessive yield-seeking behavior at the expense of liquidity.
  • The company's operating cash flow of (397.78M) shows concerning coverage of stock compensation expenses of 100.76M, with a -3.95 ratio indicating potential earnings quality issues.
  • Free cash flow of (410.85M) provides weak coverage of capital expenditures of 13.07M, with a -31.43 ratio suggesting additional external financing needs for growth initiatives.

Collaborative Arrangement and Arrangement Other than Collaborative Breakdown of Revenue (2024)

Collaborative Arrangement and Arrangement Other than Collaborative Breakdown of Revenue (2024)

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 2.67 12.96
EV to Cash from Ops. EV/CFO -7.09 23.73
EV to Debt EV to Debt 63.53 772.65
EV to EBIT EV/EBIT -5.66 -11.30
EV to EBITDA EV/EBITDA -5.28 7.11
EV to Free Cash Flow [EV/FCF] EV/FCF -6.87 22.12
EV to Market Cap EV to Market Cap 0.97 68.89
EV to Revenue EV/Rev 0.00 199.70
Price to Book Value [P/B] P/B 3.15 22.62
Price to Earnings [P/E] P/E -5.85 -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) -0.11 -27.24
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 0.36 747.06
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 0.01
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -16.67 -48.21
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -10.94 -2.09
EBIT Growth (1y) % EBIT 1y % (Qtr) -16.66 -57.79
EBT Growth (1y) % EBT 1y % (Qtr) -16.66 -14.35
EPS Growth (1y) % EPS 1y % (Qtr) -5.42 -30.88
FCF Growth (1y) % FCF 1y % (Qtr) -9.36 -32.51
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 0.00 227.96
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) 1.01 3.79
Current Ratio Curr Ratio (Qtr) 9.79 7.23
Debt to Equity Ratio Debt/Equity (Qtr) 0.05 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) 0.00 -18,509.94
EBIT Margin % EBIT Margin % (Qtr) 0.00 -18,862.18
EBT Margin % EBT Margin % (Qtr) 0.00 -19,783.19
Gross Margin % Gross Margin % (Qtr) 0.00 -8.62
Net Profit Margin % Net Margin % (Qtr) 0.00 -19,732.60