Erasca, Inc. (NASDAQ: ERAS)

Sector: Healthcare Industry: Biotechnology CIK: 0001761918
Market Cap 3.65 Bn
P/B 10.49
P/E -28.58
P/S 0.00
ROIC (Qtr) -35.22
Div Yield % 0.00
Rev 1y % (Qtr) 0.00
Total Debt (Qtr) 48.29 Mn
Debt/Equity (Qtr) 0.14

About

Price action

Investment thesis

Bull case

  • Healthy cash reserves of 70.64M provide 14.46x coverage of short-term debt 4.88M, demonstrating strong liquidity position and minimal refinancing risk.
  • Strong tangible asset base of 420.40M provides 8.71x coverage of total debt 48.29M, indicating robust asset backing and low credit risk.
  • Short-term investments of 218.17M provide solid 10.49x coverage of other current liabilities 20.80M, indicating strong liquidity.
  • Long-term investments of 73.98M provide solid 1.70x coverage of long-term debt 43.41M, indicating strategic financial planning.
  • Tangible assets of 420.40M provide robust 20.21x coverage of other current liabilities 20.80M, indicating strong asset backing.

Bear case

  • Operating cash flow of (98.31M) barely covers its investment activities of 98.33M, with a coverage ratio of -1, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Investment activities of 98.33M provide weak support for R&D spending of 95.73M, which is 1.03x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • Short-term investments of 218.17M significantly exceed cash reserves of 70.64M, which is 3.09x, indicating potentially excessive yield-seeking behavior at the expense of liquidity.
  • The company's operating cash flow of (98.31M) shows concerning coverage of stock compensation expenses of 25.38M, with a -3.87 ratio indicating potential earnings quality issues.
  • Free cash flow of (98.43M) provides weak coverage of capital expenditures of 119000, with a -827.12 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 8.64 11.11
EV to Cash from Ops. EV/CFO -36.95 26.32
EV to Debt EV to Debt 75.21 688.48
EV to EBIT EV/EBIT -28.45 -10.97
EV to EBITDA EV/EBITDA -25.79 8.32
EV to Free Cash Flow [EV/FCF] EV/FCF -36.90 25.03
EV to Market Cap EV to Market Cap 1.00 163.46
EV to Revenue EV to Revenue 0.00 148.57
Price to Book Value [P/B] P/B 10.49 20.73
Price to Earnings [P/E] P/E -28.58 -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) 16.20 -26.99
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 1.94 756.75
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 0.01
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 19.75 -53.03
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 18.99 -4.42
EBIT Growth (1y) % EBIT 1y % (Qtr) 19.75 -62.56
EBT Growth (1y) % EBT 1y % (Qtr) 19.75 -19.19
EPS Growth (1y) % EPS 1y % (Qtr) 47.56 -4.07
FCF Growth (1y) % FCF 1y % (Qtr) 10.34 -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) 2.46 3.81
Current Ratio Curr Ratio (Qtr) 10.45 7.25
Debt to Equity Ratio Debt/Equity (Qtr) 0.14 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