Septerna, Inc. (NASDAQ: SEPN)

Sector: Healthcare Industry: Biotechnology CIK: 0001984086
Market Cap 1.17 Bn
P/B 3.01
P/E -19.87
P/S 53.02
ROIC (Qtr) -18.89
Div Yield % 0.00
Rev 1y % (Qtr) 12,113.07
Total Debt (Qtr) 24.11 Mn
Debt/Equity (Qtr) 0.06

About

Price action

Investment thesis

Bull case

  • Strong operating cash flow of 104.22M provides robust 4.32x coverage of total debt 24.11M, indicating excellent debt servicing capability and financial flexibility.
  • Healthy cash reserves of 320.89M provide 151.58x coverage of short-term debt 2.12M, demonstrating strong liquidity position and minimal refinancing risk.
  • Strong tangible asset base of 606.65M provides 25.16x coverage of total debt 24.11M, indicating robust asset backing and low credit risk.
  • Operating cash flow of 104.22M provides strong 14.71x coverage of stock compensation 7.08M, indicating sustainable incentive practices.
  • Robust free cash flow of 103.15M exceeds capital expenditure of 1.06M by 96.86x, indicating strong organic growth funding capability.

Bear case

  • Operating cash flow of 104.22M barely covers its investment activities of (177.29M), with a coverage ratio of -0.59, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Investment activities of (177.29M) provide weak support for R&D spending of 85.04M, which is -2.08x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • Operating cash flow of 104.22M provides insufficient coverage of deferred revenue obligations of 182.25M, which is 0.57x, raising concerns about future service delivery capabilities.
  • Operating cash flow of 104.22M provides minimal -651.37x coverage of tax expenses of (160000), suggesting potential tax planning inefficiencies or unsustainable tax positions.
  • Operating earnings of (58.97M) show weak coverage of depreciation charges of 3.65M, with a -16.16 ratio indicating high capital intensity and potential reinvestment needs.

Peer comparison

Companies in the Biotechnology
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 SMMT Summit Therapeutics Inc. 1,446.17 Bn -1,569.17 0.00 0.01 Bn
2 ONC BeOne Medicines Ltd. 439.23 Bn 6,407.40 88.33 1.90 Bn
3 VRTX Vertex Pharmaceuticals Inc / Ma 120.62 Bn 32.82 10.29 1.83 Bn
4 REGN Regeneron Pharmaceuticals, Inc. 84.40 Bn 18.44 5.92 2.71 Bn
5 ALNY Alnylam Pharmaceuticals, Inc. 56.13 Bn 1,288.39 17.49 3.21 Bn
6 ARGX Argenx Se 47.89 Bn 31.79 24,973.95 -
7 BNTC Benitec Biopharma Inc. 42.45 Bn -1,015.00 0.00 0.00 Bn
8 INSM INSMED Inc 32.67 Bn -27.60 73.08 0.74 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 1.65 12.96
EV to Cash from Ops. EV/CFO 9.62 23.73
EV to Debt EV to Debt 41.60 772.65
EV to EBIT EV/EBIT -17.01 -11.30
EV to EBITDA EV/EBITDA -13.68 7.11
EV to Free Cash Flow [EV/FCF] EV/FCF 9.72 22.12
EV to Market Cap EV to Market Cap 0.86 68.89
EV to Revenue EV/Rev 45.50 199.70
Price to Book Value [P/B] P/B 3.01 22.62
Price to Earnings [P/E] P/E -19.87 -12.30
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 Interest Coverage 0.00 857.11
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 60.99 -27.24
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 259.96 747.06
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 0.01
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -196.28 -48.21
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -279.04 -2.09
EBIT Growth (1y) % EBIT 1y % (Qtr) -202.47 -57.79
EBT Growth (1y) % EBT 1y % (Qtr) -202.47 -14.35
EPS Growth (1y) % EPS 1y % (Qtr) 374.80 -30.88
FCF Growth (1y) % FCF 1y % (Qtr) 277.73 -32.51
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 2,147.20 227.96
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.04 0.14
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.00
Cash Ratio Cash Ratio (Qtr) 4.26 3.79
Current Ratio Curr Ratio (Qtr) 6.53 7.23
Debt to Equity Ratio Debt/Equity (Qtr) 0.06 0.42
Interest Cover Ratio Interest Cover Ratio 0.00 857.11
Times Interest Earned Times Interest Earned 0.00 857.11
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) -250.90 -18,509.94
EBIT Margin % EBIT Margin % (Qtr) -267.49 -18,862.18
EBT Margin % EBT Margin % (Qtr) -267.49 -19,783.19
Gross Margin % Gross Margin % (Qtr) 100.00 -8.62
Net Profit Margin % Net Margin % (Qtr) -266.80 -19,732.60