GRAIL, Inc. (NASDAQ: GRAL)

Sector: Healthcare Industry: Diagnostics & Research CIK: 0001699031
Market Cap 3.81 Bn
P/B 1.70
P/E -9.38
P/S 26.86
ROIC (Qtr) -18.43
Div Yield % 0.00
Rev 1y % (Qtr) 26.32
Total Debt (Qtr) 58.59 Mn
Debt/Equity (Qtr) 0.03

About

Price action

Investment thesis

Bull case

  • Healthy cash reserves of 133.87M provide 9.55x coverage of short-term debt 14.02M, demonstrating strong liquidity position and minimal refinancing risk.
  • Strong tangible asset base of 715.89M provides 12.22x coverage of total debt 58.59M, indicating robust asset backing and low credit risk.
  • Short-term investments of 413.24M provide solid 6.89x coverage of other current liabilities 60M, indicating strong liquidity.
  • Cash reserves of 133.87M provide robust 1.73x coverage of current liabilities 77.43M, indicating strong short-term solvency.
  • Tangible assets of 715.89M provide robust 11.93x coverage of other current liabilities 60M, indicating strong asset backing.

Bear case

  • Operating cash flow of (328.71M) barely covers its investment activities of (394.45M), with a coverage ratio of 0.83, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Investment activities of (394.45M) provide weak support for R&D spending of 197.23M, which is -2x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • Short-term investments of 413.24M significantly exceed cash reserves of 133.87M, which is 3.09x, indicating potentially excessive yield-seeking behavior at the expense of liquidity.
  • The company's operating cash flow of (328.71M) shows concerning coverage of stock compensation expenses of 58.10M, with a -5.66 ratio indicating potential earnings quality issues.
  • Free cash flow of (329.83M) provides weak coverage of capital expenditures of 1.12M, with a -295.02 ratio suggesting additional external financing needs for growth initiatives.

Product and Service Breakdown of Revenue (2024)

Product and Service Breakdown of Revenue (2024)

Peer comparison

Companies in the Diagnostics & Research
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 TMO Thermo Fisher Scientific Inc. 217.82 Bn 68.63 8.84 35.68 Bn
2 DHR Danaher Corp /De/ 152.30 Bn 63.15 9.19 16.86 Bn
3 IDXX Idexx Laboratories Inc /De 52.07 Bn 50.68 12.49 1.09 Bn
4 A Agilent Technologies, Inc. 43.58 Bn 58.11 13.53 3.35 Bn
5 IQV Iqvia Holdings Inc. 32.77 Bn 25.54 2.06 15.19 Bn
6 DGX Quest Diagnostics Inc 30.26 Bn 44.25 4.05 6.38 Bn
7 LH Labcorp Holdings Inc. 28.36 Bn 23.29 2.64 6.53 Bn
8 MTD Mettler Toledo International Inc/ 28.31 Bn 32.57 7.03 2.15 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 1.44 2.61
EV to Cash from Ops. EV/CFO -11.38 17.76
EV to Debt EV to Debt 63.86 46.77
EV to EBIT EV/EBIT -6.87 15.40
EV to EBITDA EV/EBITDA -8.95 5.16
EV to Free Cash Flow [EV/FCF] EV/FCF -11.34 15.58
EV to Market Cap EV to Market Cap 0.98 1.76
EV to Revenue EV/Rev 26.38 5.14
Price to Book Value [P/B] P/B 1.70 -21.17
Price to Earnings [P/E] P/E -9.38 12.08
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 -1.84
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 2.86
Dividend per Basic Share Div per Share (Qtr) 0.00 0.19
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 1.94
Interest Coverage Interest Coverage 0.00 -139.68
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 87.30 -36.38
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -84.39 23.63
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 0.25
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 80.81 10.94
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 79.99 -444.99
EBIT Growth (1y) % EBIT 1y % (Qtr) 75.54 7.67
EBT Growth (1y) % EBT 1y % (Qtr) 75.54 -7.01
EPS Growth (1y) % EPS 1y % (Qtr) 84.33 16.69
FCF Growth (1y) % FCF 1y % (Qtr) 46.92 55.89
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 16.48 185.51
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.05 0.58
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.01
Cash Ratio Cash Ratio (Qtr) 1.73 1.24
Current Ratio Curr Ratio (Qtr) 7.61 2.73
Debt to Equity Ratio Debt/Equity (Qtr) 0.03 -2.52
Interest Cover Ratio Interest Cover Ratio 0.00 -139.68
Times Interest Earned Times Interest Earned 0.00 -139.68
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) -273.60 -97.23
EBIT Margin % EBIT Margin % (Qtr) -384.26 -115.64
EBT Margin % EBT Margin % (Qtr) -384.26 -114.24
Gross Margin % Gross Margin % (Qtr) -47.50 44.75
Net Profit Margin % Net Margin % (Qtr) -286.40 -113.07