Fate Therapeutics Inc (NASDAQ: FATE)

Sector: Healthcare Industry: Biotechnology CIK: 0001434316
Market Cap 157.27 Mn
P/B 0.67
P/E -1.01
P/S 22.04
ROIC (Qtr) -53.27
Div Yield % 0.00
Rev 1y % (Qtr) -43.36
Total Debt (Qtr) 79.25 Mn
Debt/Equity (Qtr) 0.34
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About

Fate Therapeutics Inc., known by its stock symbol FATE, is a groundbreaking company operating within the clinical-stage biopharmaceutical industry. The company's primary focus lies in the development and commercialization of programmed cellular immunotherapies for the treatment of cancer and autoimmune diseases. This novel approach is founded on the idea that better cell therapies begin with better cells. Fate Therapeutics' main business activities are concentrated on the creation and engineering of human induced pluripotent stem cells (iPSCs),...

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Investment thesis

Bull case

  • Healthy cash reserves of 50.85M provide 10.70x coverage of short-term debt 4.75M, demonstrating strong liquidity position and minimal refinancing risk.
  • Strong tangible asset base of 343.67M provides 4.34x coverage of total debt 79.25M, indicating robust asset backing and low credit risk.
  • Tangible assets of 343.67M provide exceptional 68734.20x coverage of deferred revenue 5000, showing strong service capability backing.
  • Short-term investments of 174.80M provide solid 8.80x coverage of other current liabilities 19.86M, indicating strong liquidity.
  • Tangible assets of 343.67M provide robust 17.31x coverage of other current liabilities 19.86M, indicating strong asset backing.

Bear case

  • Operating cash flow of (110.57M) barely covers its investment activities of 106.35M, with a coverage ratio of -1.04, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Investment activities of 106.35M provide weak support for R&D spending of 116.01M, which is 0.92x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • Operating cash flow of (110.57M) provides insufficient coverage of deferred revenue obligations of 5000, which is -22113.80x, raising concerns about future service delivery capabilities.
  • Short-term investments of 174.80M significantly exceed cash reserves of 50.85M, which is 3.44x, indicating potentially excessive yield-seeking behavior at the expense of liquidity.
  • The company's operating cash flow of (110.57M) shows concerning coverage of stock compensation expenses of 28.52M, with a -3.88 ratio indicating potential earnings quality issues.

Product and Service Breakdown of Revenue (2024)

Related Party Transaction 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. 1,204.25 Bn -1,306.67 0.00 0.01 Bn
2 ONC BeOne Medicines Ltd. 486.51 Bn 7,097.20 97.84 1.90 Bn
3 VRTX Vertex Pharmaceuticals Inc / Ma 122.05 Bn 30.87 10.17 1.85 Bn
4 REGN Regeneron Pharmaceuticals, Inc. 83.00 Bn 18.42 5.79 2.71 Bn
5 ARGX Argenx Se 50.78 Bn 33.71 26,480.10 -
6 ALNY Alnylam Pharmaceuticals, Inc. 43.66 Bn 139.17 11.76 2.97 Bn
7 BNTC Benitec Biopharma Inc. 43.61 Bn -941.82 0.00 0.00 Bn
8 INSM INSMED Inc 28.88 Bn -24.40 64.61 0.74 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.54 11.06
EV to Cash from Ops. EV/CFO -1.69 26.32
EV to Debt EV to Debt 2.36 762.61
EV to EBIT EV/EBIT -1.20 -13.49
EV to EBITDA EV/EBITDA -1.17 8.61
EV to Free Cash Flow [EV/FCF] EV/FCF -1.62 25.66
EV to Market Cap EV to Market Cap 1.19 203.37
EV to Revenue EV/Rev 26.22 156.31
Price to Book Value [P/B] P/B 0.67 20.59
Price to Earnings [P/E] P/E -1.01 -0.88
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 -12.64
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 Int. cover (Qtr) 0.00 956.66
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -482.29 7.87
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 5.64 753.48
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 0.01
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 12.42 -57.63
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 9.85 8.83
EBIT Growth (1y) % EBIT 1y % (Qtr) 12.42 -67.21
EBT Growth (1y) % EBT 1y % (Qtr) 12.42 -23.74
EPS Growth (1y) % EPS 1y % (Qtr) 19.39 -7.02
FCF Growth (1y) % FCF 1y % (Qtr) 13.00 -40.48
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) -46.92 264.51
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.02 0.14
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.00
Cash Ratio Cash Ratio (Qtr) 1.81 3.92
Current Ratio Curr Ratio (Qtr) 7.87 7.33
Debt to Equity Ratio Debt/Equity (Qtr) 0.34 0.48
Interest Cover Ratio Int Coverage (Qtr) 0.00 956.66
Times Interest Earned Times Interest Earned (Qtr) 0.00 956.66
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) -1,981.80 -17,888.70
EBIT Margin % EBIT Margin % (Qtr) -2,187.11 -18,246.34
EBT Margin % EBT Margin % (Qtr) -2,187.11 -19,108.08
Gross Margin % Gross Margin % (Qtr) 100.00 -10.30
Net Profit Margin % Net Margin % (Qtr) -2,187.10 -19,056.96