Kura Oncology, Inc. (NASDAQ: KURA)

Sector: Healthcare Industry: Biotechnology CIK: 0001422143
Market Cap 834.30 Mn
P/B 3.44
P/E -3.85
P/S 8.02
ROIC (Qtr) -81.71
Div Yield % 0.00
Rev 1y % (Qtr) 0.00
Total Debt (Qtr) 19.47 Mn
Debt/Equity (Qtr) 0.08

About

Kura Oncology, Inc., a clinical-stage biopharmaceutical company, is dedicated to the development of precision medicines for cancer treatment. The company's primary business activities include discovering, acquiring, developing, and commercializing innovative anti-cancer agents, with a particular focus on oncology indications that have significant unmet medical needs and attractive commercial potential. Kura Oncology's approach to developing precision medicines involves a disciplined strategy designed to identify response signals early in development...

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Price action

Investment thesis

Bull case

  • Strong operating cash flow of 87.80M provides robust 4.51x coverage of total debt 19.47M, indicating excellent debt servicing capability and financial flexibility.
  • Healthy cash reserves of 95.29M provide 16.53x coverage of short-term debt 5.77M, demonstrating strong liquidity position and minimal refinancing risk.
  • Strong tangible asset base of 649.38M provides 33.36x coverage of total debt 19.47M, indicating robust asset backing and low credit risk.
  • Operating cash flow of 87.80M provides exceptional 55.96x coverage of interest expenses 1.57M, showing strong debt service capability.
  • Robust free cash flow of 83.11M exceeds capital expenditure of 4.69M by 17.72x, indicating strong organic growth funding capability.

Bear case

  • Operating cash flow of 87.80M barely covers its investment activities of (43.46M), with a coverage ratio of -2.02, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Investment activities of (43.46M) provide weak support for R&D spending of 238.93M, which is -0.18x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • Operating cash flow of 87.80M provides insufficient coverage of deferred revenue obligations of 268.85M, which is 0.33x, raising concerns about future service delivery capabilities.
  • Short-term investments of 454.38M significantly exceed cash reserves of 95.29M, which is 4.77x, indicating potentially excessive yield-seeking behavior at the expense of liquidity.
  • The company's operating cash flow of 87.80M shows concerning coverage of stock compensation expenses of 34.39M, with a 2.55 ratio indicating potential earnings quality issues.

Peer comparison

Companies in the Biotechnology
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 SMMT Summit Therapeutics Inc. 1,339.42 Bn -1,453.33 0.00 0.01 Bn
2 ONC BeOne Medicines Ltd. 439.13 Bn 6,406.00 88.31 1.90 Bn
3 VRTX Vertex Pharmaceuticals Inc / Ma 115.26 Bn 31.36 9.83 1.83 Bn
4 REGN Regeneron Pharmaceuticals, Inc. 80.42 Bn 17.57 5.64 2.71 Bn
5 ALNY Alnylam Pharmaceuticals, Inc. 55.91 Bn 1,283.32 17.42 3.21 Bn
6 ARGX Argenx Se 48.21 Bn 32.01 25,140.64 -
7 BNTC Benitec Biopharma Inc. 41.44 Bn -990.83 0.00 0.00 Bn
8 INSM INSMED Inc 33.62 Bn -28.40 75.20 0.74 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 1.19 12.03
EV to Cash from Ops. EV/CFO 8.79 24.48
EV to Debt EV to Debt 39.65 723.99
EV to EBIT EV/EBIT -3.62 -11.25
EV to EBITDA EV/EBITDA -3.23 7.32
EV to Free Cash Flow [EV/FCF] EV/FCF 9.29 22.99
EV to Market Cap EV to Market Cap 0.93 74.34
EV to Revenue EV/Rev 7.42 201.79
Price to Book Value [P/B] P/B 3.44 21.33
Price to Earnings [P/E] P/E -3.85 -12.12
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 -11.88
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 0.16
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) -135.80 844.86
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -3,942.24 -26.49
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 92.58 738.63
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 0.01
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -9.88 -47.38
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -10.31 -2.17
EBIT Growth (1y) % EBIT 1y % (Qtr) -8.74 -56.87
EBT Growth (1y) % EBT 1y % (Qtr) -8.65 -13.94
EPS Growth (1y) % EPS 1y % (Qtr) -5.08 -29.66
FCF Growth (1y) % FCF 1y % (Qtr) 149.11 -32.38
Gross Profit Growth (1y) % Gross Profit Growth (1y) % 0.00 225.01
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.16 0.14
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.00
Cash Ratio Cash Ratio (Qtr) 0.79 3.78
Current Ratio Curr Ratio (Qtr) 5.12 7.19
Debt to Equity Ratio Debt/Equity (Qtr) 0.08 0.40
Interest Cover Ratio Int Coverage (Qtr) -135.80 844.86
Times Interest Earned Times Interest Earned (Qtr) -135.80 844.86
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) -204.00 -18,291.27
EBIT Margin % EBIT Margin % (Qtr) -204.82 -18,639.46
EBT Margin % EBT Margin % (Qtr) -206.33 -19,549.55
Gross Margin % Gross Margin % (Qtr) 100.00 -8.05
Net Profit Margin % Net Margin % (Qtr) -208.50 -19,499.63