Foghorn Therapeutics Inc. (NASDAQ: FHTX)

Sector: Healthcare Industry: Biotechnology CIK: 0001822462
Market Cap 333.80 Mn
P/B -3.72
P/E -4.63
P/S 13.61
ROIC (Qtr) 144.09
Div Yield % 0.00
Rev 1y % (Qtr) 4.42
Total Debt (Qtr) 22.53 Mn
Debt/Equity (Qtr) -0.25

About

Price action

Investment thesis

Bull case

  • Healthy cash reserves of 92.58M provide 13.71x coverage of short-term debt 6.75M, demonstrating strong liquidity position and minimal refinancing risk.
  • Strong tangible asset base of 204.96M provides 9.10x coverage of total debt 22.53M, indicating robust asset backing and low credit risk.
  • Operating cash flow of (88.35M) fully covers other non-current liabilities (64.64M) by 1.37x, showing strong long-term stability.
  • Short-term investments of 90.94M provide solid 1.21x coverage of other current liabilities 75.12M, indicating strong liquidity.
  • Retained earnings of (610.80M) represent substantial 6.81x of equity (89.66M), indicating strong internal capital generation.

Bear case

  • Operating cash flow of (88.35M) barely covers its investment activities of 121.10M, with a coverage ratio of -0.73, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Investment activities of 121.10M provide weak support for R&D spending of 83.93M, which is 1.44x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • Operating cash flow of (88.35M) provides insufficient coverage of deferred revenue obligations of 258.40M, which is -0.34x, raising concerns about future service delivery capabilities.
  • The company's operating cash flow of (88.35M) shows concerning coverage of stock compensation expenses of 10.64M, with a -8.30 ratio indicating potential earnings quality issues.
  • Free cash flow of (88.88M) provides weak coverage of capital expenditures of 529000, with a -168.01 ratio suggesting additional external financing needs for growth initiatives.

Segments 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 1.37 12.96
EV to Cash from Ops. EV/CFO -3.19 23.73
EV to Debt EV to Debt 12.50 772.65
EV to EBIT EV/EBIT -3.91 -11.30
EV to EBITDA EV/EBITDA -3.61 7.11
EV to Free Cash Flow [EV/FCF] EV/FCF -3.17 22.12
EV to Market Cap EV to Market Cap 0.84 68.89
EV to Revenue EV/Rev 11.49 199.70
Price to Book Value [P/B] P/B -3.72 22.62
Price to Earnings [P/E] P/E -4.63 -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 Int. cover (Qtr) 0.00 857.11
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -13.76 -27.24
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 55.90 747.06
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 0.01
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 20.94 -48.21
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 17.99 -2.09
EBIT Growth (1y) % EBIT 1y % (Qtr) 19.18 -57.79
EBT Growth (1y) % EBT 1y % (Qtr) 19.18 -14.35
EPS Growth (1y) % EPS 1y % (Qtr) 41.15 -30.88
FCF Growth (1y) % FCF 1y % (Qtr) 14.45 -32.51
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) -3.91 227.96
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.12 0.14
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.00
Cash Ratio Cash Ratio (Qtr) 1.09 3.79
Current Ratio Curr Ratio (Qtr) 2.16 7.23
Debt to Equity Ratio Debt/Equity (Qtr) -0.25 0.42
Interest Cover Ratio Int Coverage (Qtr) 0.00 857.11
Times Interest Earned Times Interest Earned (Qtr) 0.00 857.11
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) -260.00 -18,509.94
EBIT Margin % EBIT Margin % (Qtr) -294.16 -18,862.18
EBT Margin % EBT Margin % (Qtr) -294.16 -19,783.19
Gross Margin % Gross Margin % (Qtr) 100.00 -8.62
Net Profit Margin % Net Margin % (Qtr) -294.20 -19,732.60