Nektar Therapeutics (NASDAQ: NKTR)

Sector: Healthcare Industry: Biotechnology CIK: 0000906709
P/B 9.93
P/E -6.99
P/S 13.49
Market Cap 844.53 Mn
ROIC (Qtr) -78.73
Div Yield % 0.00
Rev 1y % (Qtr) -51.13
Total Debt (Qtr) 91.92 Mn
Debt/Equity (Qtr) 1.08

About

Nektar Therapeutics (NKTR) is a clinical-stage biopharmaceutical company operating in the immunotherapy sector. The company specializes in the discovery and development of innovative medicines, with a focus on immunomodulatory agents for the treatment of autoimmune diseases and cancer. Nektar's operations span across various countries and regions, including the United States, Europe, and Asia. The company generates revenue primarily through the development and commercialization of its proprietary drug candidates. These include rezpegaldesleukin,...

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Analysis

Pros

  • Robust free cash flow of (124.97M) exceeds capital expenditure of (64.77M) by 1.93x, indicating strong organic growth funding capability.
  • Strong tangible asset base of 301.35M provides 3.28x coverage of total debt 91.92M, indicating robust asset backing and low credit risk.
  • Strong free cash flow of (124.97M) provides 179.29x coverage of acquisition spending (697000), indicating disciplined M&A strategy.
  • Short-term investments of 229.18M provide solid 8.01x coverage of other current liabilities 28.59M, indicating strong liquidity.
  • Operating cash flow of (189.74M) provides strong 4.96x coverage of operating expenses (38.27M), showing operational efficiency.

Cons

  • Operating cash flow of (189.74M) barely covers its investment activities of 58.65M, with a coverage ratio of -3.24, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Investment activities of 58.65M provide weak support for R&D spending of 116.36M, which is 0.50x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • Cash reserves of 41.03M provide limited coverage of acquisition spending of (697000), which is -58.87x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • Short-term investments of 229.18M significantly exceed cash reserves of 41.03M, which is 5.59x, indicating potentially excessive yield-seeking behavior at the expense of liquidity.
  • The company's operating cash flow of (189.74M) shows concerning coverage of stock compensation expenses of 15.26M, with a -12.43 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. 1,349.40 Bn -1,464.17 0.00 0.01 Bn
2 ONC BeOne Medicines Ltd. 437.43 Bn 6,381.20 87.97 1.90 Bn
3 VRTX Vertex Pharmaceuticals Inc / Ma 116.09 Bn 31.59 9.90 1.83 Bn
4 REGN Regeneron Pharmaceuticals, Inc. 78.10 Bn 17.06 5.48 2.71 Bn
5 ALNY Alnylam Pharmaceuticals, Inc. 55.87 Bn 1,282.42 17.40 3.21 Bn
6 ARGX Argenx Se 52.85 Bn 35.08 27,559.65 -
7 BNTC Benitec Biopharma Inc. 41.75 Bn -998.33 0.00 0.00 Bn
8 INSM INSMED Inc 37.80 Bn -31.93 84.56 0.74 Bn

Industry Comparisons

Current Valuation

Metric Value Industry Percentile
EV to Assets 2.98 12.31
EV to Cash from Ops. -4.73 23.25
EV to Debt 9.77 738.44
EV to EBIT -9.49 -9.16
EV to EBITDA -9.26 6.95
EV to Free Cash Flow [EV/FCF] -7.18 21.90
EV to Market Cap 1.06 65.67
EV to Revenue 14.34 227.32
Price to Book Value [P/B] 9.93 22.34
Price to Earnings [P/E] -6.99 -11.77

Dividend Metrics

Metric Value Industry Percentile
Dividend Coverage Ratio 0.00 -11.94
Dividend Payout Ratio % 0.00 0.16
Dividend per Basic Share 0.00 0.01
FCF Dividend Payout Ratio % 0.00 -0.14
Interest Coverage -3.56 841.00

Growth Metrics

Metric Value Industry Percentile
Capex Growth (1y) % 5,298.56 -27.13
Cash and Equivalents Growth (1y) % 36.28 734.65
Dividend Growth (1y) % 0.00 0.01
EBIAT Growth (1y) % 34.30 -46.93
EBITDA Growth (1y) % 34.22 -1.68
EBIT Growth (1y) % 34.07 -56.45
EBT Growth (1y) % 28.01 -12.70
EPS Growth (1y) % 37.79 -28.31
FCF Growth (1y) % 29.72 -31.90
Gross Profit Growth (1y) % -13.50 226.84

Liquidity Ratios

Metric Value Industry Percentile
Asset Utilization Ratio 0.21 0.14
Cash Payout Ratio 0.00 0.00
Cash Ratio 0.62 3.85
Current Ratio 4.24 7.27
Debt to Equity Ratio 1.08 0.40
Interest Cover Ratio -3.56 841.00
Times Interest Earned -3.56 841.00

Profitability

Metric Value Industry Percentile
EBITDA Margin % -149.20 -18,234.31
EBIT Margin % -151.11 -18,580.80
EBT Margin % -193.55 -19,488.74
Gross Margin % 87.30 -7.59
Net Profit Margin % -192.90 -19,439.22