Heron Therapeutics, Inc. /De/ (NASDAQ: HRTX)

Sector: Healthcare Industry: Biotechnology CIK: 0000818033
Market Cap 235.92 Mn
P/B 15.85
P/E -17.38
P/S 1.52
ROIC (Qtr) 1.05
Div Yield % 0.00
Rev 1y % (Qtr) 16.47
Total Debt (Qtr) 140.44 Mn
Debt/Equity (Qtr) 9.44

About

Heron Therapeutics, Inc., or HRTX, is a commercial-stage biotechnology company operating within the healthcare and life sciences industry. The company is dedicated to enhancing patient care through the development and commercialization of innovative therapeutic solutions. Its headquarters are located in the United States, and its operations span across various regions, focusing on acute care and oncology patients. HRTX's primary business activities revolve around the research, development, and commercialization of pharmaceutical products. These...

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Price action

Investment thesis

Bull case

  • Healthy cash reserves of 43.07M provide 55.22x coverage of short-term debt 780000, demonstrating strong liquidity position and minimal refinancing risk.
  • Cash reserves of 43.07M provide solid 9.18x coverage of other non-current liabilities 4.69M, indicating strong liquidity.
  • Short-term investments of 12.42M provide 15.92x coverage of short-term debt 780000, showing strong liquidity management.
  • Strong R&D investment of 11.86M at 14.02x of capex 846000 shows balanced investment in innovation and infrastructure.
  • Tangible assets of 248.95M provide robust 2.78x coverage of current liabilities 89.71M, showing strong asset backing.

Bear case

  • Operating cash flow of (30.19M) barely covers its investment activities of 32.88M, with a coverage ratio of -0.92, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • The company's operating cash flow of (30.19M) shows concerning coverage of stock compensation expenses of 10.46M, with a -2.89 ratio indicating potential earnings quality issues.
  • Free cash flow of (31.03M) provides weak coverage of capital expenditures of 846000, with a -36.68 ratio suggesting additional external financing needs for growth initiatives.
  • Operating earnings of (11.10M) show weak coverage of depreciation charges of 2.36M, with a -4.71 ratio indicating high capital intensity and potential reinvestment needs.
  • R&D investment of 11.86M represents just 0.12x of SG&A expenses of 101.18M, indicating potential underinvestment in innovation relative to administrative overhead.

Peer comparison

Companies in the Biotechnology
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 SMMT Summit Therapeutics Inc. 1,511.45 Bn -1,640.00 0.00 0.01 Bn
2 ONC BeOne Medicines Ltd. 463.25 Bn 6,757.80 93.16 1.90 Bn
3 VRTX Vertex Pharmaceuticals Inc / Ma 119.13 Bn 32.42 10.16 1.83 Bn
4 REGN Regeneron Pharmaceuticals, Inc. 83.93 Bn 18.33 5.89 2.71 Bn
5 ALNY Alnylam Pharmaceuticals, Inc. 55.97 Bn 1,284.81 17.44 3.21 Bn
6 ARGX Argenx Se 47.47 Bn 31.51 24,751.70 -
7 BNTC Benitec Biopharma Inc. 41.27 Bn -986.67 0.00 0.00 Bn
8 INSM INSMED Inc 33.76 Bn -28.52 75.53 0.74 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 1.59 13.39
EV to Cash from Ops. EV/CFO -13.12 23.02
EV to Debt EV to Debt 2.82 789.59
EV to EBIT EV/EBIT -35.70 -11.14
EV to EBITDA EV/EBITDA 100.16 7.05
EV to Free Cash Flow [EV/FCF] EV/FCF -12.77 21.44
EV to Market Cap EV to Market Cap 1.68 72.36
EV to Revenue EV/Rev 2.55 194.41
Price to Book Value [P/B] P/B 15.85 23.19
Price to Earnings [P/E] P/E -17.38 -11.47
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) -4.47 856.48
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 35.17 -27.12
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 67.31 747.06
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 0.01
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 59.60 -48.05
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 116.98 -1.94
EBIT Growth (1y) % EBIT 1y % (Qtr) 59.60 -57.64
EBT Growth (1y) % EBT 1y % (Qtr) 51.45 -14.19
EPS Growth (1y) % EPS 1y % (Qtr) 50.00 -30.71
FCF Growth (1y) % FCF 1y % (Qtr) -223.29 -32.52
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 15.30 227.96
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.62 0.14
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.00
Cash Ratio Cash Ratio (Qtr) 0.48 3.79
Current Ratio Curr Ratio (Qtr) 2.56 7.23
Debt to Equity Ratio Debt/Equity (Qtr) 9.44 0.42
Interest Cover Ratio Int Coverage (Qtr) -4.47 856.48
Times Interest Earned Times Interest Earned (Qtr) -4.47 856.48
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) -5.60 -18,509.94
EBIT Margin % EBIT Margin % (Qtr) -7.15 -18,862.18
EBT Margin % EBT Margin % (Qtr) -8.75 -19,783.19
Gross Margin % Gross Margin % (Qtr) 73.90 -8.62
Net Profit Margin % Net Margin % (Qtr) -8.80 -19,732.60