Design Therapeutics, Inc. (NASDAQ: DSGN)

Sector: Healthcare Industry: Biotechnology CIK: 0001807120
Market Cap 582.08 Mn
P/B 2.91
P/E -8.63
P/S 0.00
ROIC (Qtr) -37.61
Div Yield % 0.00
Rev 1y % (Qtr) 0.00
Total Debt (Qtr) 877,000.00
Debt/Equity (Qtr) 0.00

About

Design Therapeutics, Inc. (DSGN) is a biopharmaceutical company that operates in the rapidly growing field of biotechnology. The company specializes in the research and development of GeneTACTM molecules, a novel class of small-molecule gene targeted chimera therapeutic candidates designed to address the underlying cause of inherited nucleotide repeat expansion diseases. Design Therapeutics' primary business activities involve the design, development, and commercialization of GeneTACTM molecules. These molecules are designed to selectively target...

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Price action

Investment thesis

Bull case

  • Strong tangible asset base of 211.77M provides 241.47x coverage of total debt 877000, indicating robust asset backing and low credit risk.
  • Short-term investments of 190.88M provide solid 20.61x coverage of other current liabilities 9.26M, indicating strong liquidity.
  • Tangible assets of 211.77M provide robust 22.87x coverage of other current liabilities 9.26M, indicating strong asset backing.
  • Cash reserves of 15.09M provide robust 1.35x coverage of current liabilities 11.17M, indicating strong short-term solvency.
  • Strong cash position of 15.09M provides 1.63x coverage of other current liabilities 9.26M, indicating excellent liquidity.

Bear case

  • Operating cash flow of (52.25M) barely covers its investment activities of 36.33M, with a coverage ratio of -1.44, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Investment activities of 36.33M provide weak support for R&D spending of 57.86M, which is 0.63x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • Short-term investments of 190.88M significantly exceed cash reserves of 15.09M, which is 12.65x, indicating potentially excessive yield-seeking behavior at the expense of liquidity.
  • The company's operating cash flow of (52.25M) shows concerning coverage of stock compensation expenses of 14.59M, with a -3.58 ratio indicating potential earnings quality issues.
  • Free cash flow of (52.41M) provides weak coverage of capital expenditures of 159000, with a -329.63 ratio suggesting additional external financing needs for growth initiatives.

Peer comparison

Companies in the Biotechnology
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 SMMT Summit Therapeutics Inc. 1,151.25 Bn -1,249.17 0.00 0.01 Bn
2 ONC BeOne Medicines Ltd. 485.22 Bn 7,078.40 97.58 1.90 Bn
3 VRTX Vertex Pharmaceuticals Inc / Ma 122.74 Bn 33.40 10.47 1.83 Bn
4 REGN Regeneron Pharmaceuticals, Inc. 82.16 Bn 18.24 5.73 2.71 Bn
5 ARGX Argenx Se 48.85 Bn 32.43 25,472.44 -
6 ALNY Alnylam Pharmaceuticals, Inc. 46.12 Bn 1,058.58 14.37 3.21 Bn
7 BNTC Benitec Biopharma Inc. 42.24 Bn -1,010.00 0.00 0.00 Bn
8 INSM INSMED Inc 28.75 Bn -24.29 64.32 0.74 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 2.66 11.11
EV to Cash from Ops. EV/CFO -10.78 26.32
EV to Debt EV to Debt 642.50 688.48
EV to EBIT EV/EBIT -8.35 -10.97
EV to EBITDA EV/EBITDA -7.28 8.32
EV to Free Cash Flow [EV/FCF] EV/FCF -10.75 25.03
EV to Market Cap EV to Market Cap 0.97 163.46
EV to Revenue EV/Rev 0.00 148.57
Price to Book Value [P/B] P/B 2.91 20.73
Price to Earnings [P/E] P/E -8.63 -0.34
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) 56.68 -26.99
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -50.25 756.75
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 0.01
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -41.16 -53.03
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -28.54 -4.42
EBIT Growth (1y) % EBIT 1y % (Qtr) -41.16 -62.56
EBT Growth (1y) % EBT 1y % (Qtr) -41.16 -19.19
EPS Growth (1y) % EPS 1y % (Qtr) -40.00 -4.07
FCF Growth (1y) % FCF 1y % (Qtr) -12.93 -33.40
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) 1.35 3.81
Current Ratio Curr Ratio (Qtr) 18.71 7.25
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 % (Qtr) 0.00 -17,746.13
EBIT Margin % EBIT Margin % (Qtr) 0.00 -18,101.92
EBT Margin % EBT Margin % (Qtr) 0.00 -18,961.86
Gross Margin % Gross Margin % (Qtr) 0.00 -9.24
Net Profit Margin % Net Margin % (Qtr) 0.00 -18,911.61