Edgewise Therapeutics, Inc. (NASDAQ: EWTX)

Sector: Healthcare Industry: Biotechnology CIK: 0001710072
Market Cap 2.90 Bn
P/B 5.18
P/E -18.42
P/S 0.00
ROIC (Qtr) -31.30
Div Yield % 0.00
Rev 1y % (Qtr) 0.00
Total Debt (Qtr) 4.18 Mn
Debt/Equity (Qtr) 0.01

About

Edgewise Therapeutics, Inc. (EWTX) is a clinical-stage biopharmaceutical company that operates within the healthcare and life sciences industry. The company's primary focus is on the discovery, development, and commercialization of innovative treatments for severe muscle diseases. Edgewise's mission is to improve the lives of people facing serious muscle disease, recognizing the urgency for effective treatments for patients with rare and debilitating diseases. Edgewise's operations span across multiple clinical-stage programs and several preclinical...

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Price action

Investment thesis

Bull case

  • Healthy cash reserves of 46M provide 45.64x coverage of short-term debt 1.01M, demonstrating strong liquidity position and minimal refinancing risk.
  • Strong tangible asset base of 583.47M provides 139.55x coverage of total debt 4.18M, indicating robust asset backing and low credit risk.
  • Short-term investments of 517.34M provide solid 35.73x coverage of other current liabilities 14.48M, indicating strong liquidity.
  • Tangible assets of 583.47M provide robust 40.29x coverage of other current liabilities 14.48M, indicating strong asset backing.
  • Short-term investments of 517.34M provide 513.23x coverage of short-term debt 1.01M, showing strong liquidity management.

Bear case

  • Investment activities of (61.63M) provide weak support for R&D spending of 144.16M, which is -0.43x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • The company's operating cash flow of (132.18M) shows concerning coverage of stock compensation expenses of 32.61M, with a -4.05 ratio indicating potential earnings quality issues.
  • Short-term investments of 517.34M significantly exceed cash reserves of 46M, which is 11.25x, indicating potentially excessive yield-seeking behavior at the expense of liquidity.
  • Free cash flow of (132.64M) provides weak coverage of capital expenditures of 457000, with a -290.24 ratio suggesting additional external financing needs for growth initiatives.
  • Operating earnings of (157.24M) show weak coverage of depreciation charges of 2.32M, with a -67.78 ratio indicating high capital intensity and potential reinvestment needs.

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 4.90 11.11
EV to Cash from Ops. EV/CFO -21.61 26.32
EV to Debt EV to Debt 683.33 688.48
EV to EBIT EV/EBIT -18.17 -10.97
EV to EBITDA EV/EBITDA -15.99 8.32
EV to Free Cash Flow [EV/FCF] EV/FCF -21.54 25.03
EV to Market Cap EV to Market Cap 0.99 163.46
EV to Revenue EV to Revenue 0.00 148.57
Price to Book Value [P/B] P/B 5.18 20.73
Price to Earnings [P/E] P/E -18.42 -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) 61.88 -26.99
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 2.67 756.75
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 0.01
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -26.51 -53.03
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -23.24 -4.42
EBIT Growth (1y) % EBIT 1y % (Qtr) -26.51 -62.56
EBT Growth (1y) % EBT 1y % (Qtr) -26.51 -19.19
EPS Growth (1y) % EPS 1y % (Qtr) -5.33 -4.07
FCF Growth (1y) % FCF 1y % (Qtr) -20.47 -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) 2.13 3.81
Current Ratio Curr Ratio (Qtr) 26.51 7.25
Debt to Equity Ratio Debt/Equity (Qtr) 0.01 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