Arcus Biosciences, Inc. (NYSE: RCUS)

Sector: Healthcare Industry: Biotechnology CIK: 0001724521
Market Cap 2.08 Bn
P/B 4.78
P/E -6.11
P/S 8.69
ROIC (Qtr) -63.56
Div Yield % 0.00
Rev 1y % (Qtr) -45.83
Total Debt (Qtr) 98.00 Mn
Debt/Equity (Qtr) 0.22

About

Arcus Biosciences, a clinical-stage biopharmaceutical company, is dedicated to the creation of best-in-class therapies for the treatment of various diseases (Arcus Biosciences, Inc.). With a focus on developing novel small molecules and enabling antibodies that target different immune mechanisms and cell-intrinsic pathways crucial for cancer growth and metastasis, Arcus Biosciences operates in the biotechnology industry, specifically in the field of oncology (Arcus Biosciences, Inc.). The company's operations span across various countries, including...

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Price action

Investment thesis

Bull case

  • Strong tangible asset base of 974M provides 9.94x coverage of total debt 98M, indicating robust asset backing and low credit risk.
  • Tangible assets of 974M provide exceptional 9.28x coverage of deferred revenue 105M, showing strong service capability backing.
  • Short-term investments of 593M provide solid 3.07x coverage of other current liabilities 193M, indicating strong liquidity.
  • Tangible assets of 974M provide robust 5.05x coverage of other current liabilities 193M, indicating strong asset backing.
  • Cash reserves of 238M provide robust 1.01x coverage of current liabilities 235M, indicating strong short-term solvency.

Bear case

  • Operating cash flow of (462M) barely covers its investment activities of 299M, with a coverage ratio of -1.55, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Investment activities of 299M provide weak support for R&D spending of 503M, which is 0.59x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • Operating cash flow of (462M) provides insufficient coverage of deferred revenue obligations of 105M, which is -4.40x, raising concerns about future service delivery capabilities.
  • The company's operating cash flow of (462M) shows concerning coverage of stock compensation expenses of 62M, with a -7.45 ratio indicating potential earnings quality issues.
  • Operating earnings of (332M) show weak coverage of depreciation charges of 17M, with a -19.53 ratio indicating high capital intensity and potential reinvestment needs.

Collaborative Arrangement and Arrangement Other than Collaborative Breakdown of Revenue (2024)

Segments Breakdown of Revenue (2024)

Peer comparison

Companies in the Biotechnology
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 SMMT Summit Therapeutics Inc. 1,151.25 Bn -1,249.17 0.00 0.01 Bn
2 ONC BeOne Medicines Ltd. 485.22 Bn 7,078.40 97.58 1.90 Bn
3 VRTX Vertex Pharmaceuticals Inc / Ma 122.74 Bn 33.40 10.47 1.83 Bn
4 REGN Regeneron Pharmaceuticals, Inc. 82.16 Bn 18.24 5.73 2.71 Bn
5 ARGX Argenx Se 48.85 Bn 32.43 25,472.44 -
6 ALNY Alnylam Pharmaceuticals, Inc. 46.12 Bn 1,058.58 14.37 3.21 Bn
7 BNTC Benitec Biopharma Inc. 42.24 Bn -1,010.00 0.00 0.00 Bn
8 INSM INSMED Inc 28.75 Bn -24.29 64.32 0.74 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 1.99 11.11
EV to Cash from Ops. EV/CFO -4.19 26.32
EV to Debt EV to Debt 19.73 688.48
EV to EBIT EV/EBIT -5.82 -10.97
EV to EBITDA EV/EBITDA -5.40 8.32
EV to Free Cash Flow [EV/FCF] EV/FCF -4.17 25.03
EV to Market Cap EV to Market Cap 0.93 163.46
EV to Revenue EV/Rev 8.06 148.57
Price to Book Value [P/B] P/B 4.78 20.73
Price to Earnings [P/E] P/E -6.11 -0.34
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 -12.47
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) -41.50 860.86
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 81.82 -26.99
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 18.41 756.75
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 0.01
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -24.25 -53.03
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -18.94 -4.42
EBIT Growth (1y) % EBIT 1y % (Qtr) -24.34 -62.56
EBT Growth (1y) % EBT 1y % (Qtr) -26.39 -19.19
EPS Growth (1y) % EPS 1y % (Qtr) -9.21 -4.07
FCF Growth (1y) % FCF 1y % (Qtr) -174.56 -33.40
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) -8.75 264.38
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.25 0.14
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.00
Cash Ratio Cash Ratio (Qtr) 1.01 3.81
Current Ratio Curr Ratio (Qtr) 3.65 7.25
Debt to Equity Ratio Debt/Equity (Qtr) 0.22 0.43
Interest Cover Ratio Int Coverage (Qtr) -41.50 860.86
Times Interest Earned Times Interest Earned (Qtr) -41.50 860.86
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) -131.20 -17,746.13
EBIT Margin % EBIT Margin % (Qtr) -138.33 -18,101.92
EBT Margin % EBT Margin % (Qtr) -141.67 -18,961.86
Gross Margin % Gross Margin % (Qtr) 100.00 -9.24
Net Profit Margin % Net Margin % (Qtr) -142.10 -18,911.61