Krystal Biotech, Inc. (NASDAQ: KRYS)

Sector: Healthcare Industry: Biotechnology CIK: 0001711279
Market Cap 8.33 Bn
P/B 6.83
P/E 40.66
P/S 21.40
ROIC (Qtr) 13.65
Div Yield % 0.00
Rev 1y % (Qtr) 17.52
Total Debt (Qtr) 9.34 Mn
Debt/Equity (Qtr) 0.01
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About

Krystal Biotech, Inc. (KRYS) is a commercial-stage biotechnology company operating in the genetic medicine industry. With a focus on the discovery, development, and commercialization of genetic medicines, Krystal Biotech aims to treat diseases with high unmet medical needs. The company's technology platform is based on engineered herpes simplex virus type 1 (HSV-1), which is designed to deliver therapeutic transgenes to cells of interest in multiple organ systems. Krystal Biotech's main business activities involve the development of gene therapies...

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Investment thesis

Bull case

  • Strong operating cash flow of 200.87M provides robust 21.51x coverage of total debt 9.34M, indicating excellent debt servicing capability and financial flexibility.
  • Healthy cash reserves of 496.30M provide 280.24x coverage of short-term debt 1.77M, demonstrating strong liquidity position and minimal refinancing risk.
  • Strong tangible asset base of 1.33B provides 142.82x coverage of total debt 9.34M, indicating robust asset backing and low credit risk.
  • Robust free cash flow of 189.35M exceeds capital expenditure of 11.52M by 16.44x, indicating strong organic growth funding capability.
  • Long-term investments of 128.07M provide solid 16.92x coverage of long-term debt 7.57M, indicating strategic financial planning.

Bear case

  • Operating cash flow of 200.87M barely covers its investment activities of (58.42M), with a coverage ratio of -3.44, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Investment activities of (58.42M) provide weak support for R&D spending of 58.05M, which is -1.01x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • High receivables of 127.42M relative to inventory of 40.48M (3.15 ratio) suggests aggressive credit terms or collection difficulties, potentially masking revenue quality issues.
  • The company's operating cash flow of 200.87M shows concerning coverage of stock compensation expenses of 54.51M, with a 3.68 ratio indicating potential earnings quality issues.
  • Operating cash flow of 200.87M provides minimal -13.08x coverage of tax expenses of (15.36M), suggesting potential tax planning inefficiencies or unsustainable tax positions.

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 5.96 11.06
EV to Cash from Ops. EV/CFO 39.55 26.32
EV to Debt EV to Debt 850.67 762.61
EV to EBIT EV/EBIT 41.93 -13.49
EV to EBITDA EV/EBITDA 47.33 8.61
EV to Free Cash Flow [EV/FCF] EV/FCF 41.96 25.66
EV to Market Cap EV to Market Cap 0.95 203.37
EV to Revenue EV/Rev 20.42 156.31
Price to Book Value [P/B] P/B 6.83 20.59
Price to Earnings [P/E] P/E 40.66 -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) -171.73 7.87
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 43.91 753.48
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 0.01
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 129.74 -57.63
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 131.63 8.83
EBIT Growth (1y) % EBIT 1y % (Qtr) 98.70 -67.21
EBT Growth (1y) % EBT 1y % (Qtr) 98.70 -23.74
EPS Growth (1y) % EPS 1y % (Qtr) 126.92 -7.02
FCF Growth (1y) % FCF 1y % (Qtr) 58.87 -40.48
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 35.36 264.51
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.29 0.14
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.00
Cash Ratio Cash Ratio (Qtr) 4.82 3.92
Current Ratio Curr Ratio (Qtr) 9.95 7.33
Debt to Equity Ratio Debt/Equity (Qtr) 0.01 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) 50.40 -17,888.70
EBIT Margin % EBIT Margin % (Qtr) 48.69 -18,246.34
EBT Margin % EBT Margin % (Qtr) 48.69 -19,108.08
Gross Margin % Gross Margin % (Qtr) 94.10 -10.30
Net Profit Margin % Net Margin % (Qtr) 52.60 -19,056.96