Scholar Rock Holding Corp (NASDAQ: SRRK)

Sector: Healthcare Industry: Biotechnology CIK: 0001727196
Market Cap 4.66 Bn
P/B 19.02
P/E -13.19
P/S 0.00
ROIC (Qtr) -111.44
Div Yield % 0.00
Rev 1y % (Qtr) 0.00
Total Debt (Qtr) 110.08 Mn
Debt/Equity (Qtr) 0.45

About

Scholar Rock Holding Corp, known by its ticker symbol SRRK, is a prominent player in the biopharmaceutical industry. The company specializes in the discovery, development, and delivery of innovative medicines for the treatment of serious diseases where signaling by protein growth factors plays a crucial role. Scholar Rock's primary business activities revolve around the development of novel product candidates that selectively inhibit the activation of latent growth factors, which are believed to be significant drivers in a range of diseases. These...

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Price action

Investment thesis

Bull case

  • Healthy cash reserves of 290.58M provide 54.57x coverage of short-term debt 5.33M, demonstrating strong liquidity position and minimal refinancing risk.
  • Strong tangible asset base of 411.72M provides 3.74x coverage of total debt 110.08M, indicating robust asset backing and low credit risk.
  • Short-term investments of 82.86M provide solid 1.66x coverage of other current liabilities 49.88M, indicating strong liquidity.
  • Tangible assets of 411.72M provide robust 8.25x coverage of other current liabilities 49.88M, indicating strong asset backing.
  • Cash reserves of 290.58M provide robust 4.69x coverage of current liabilities 61.97M, indicating strong short-term solvency.

Bear case

  • Investment activities of (15.65M) provide weak support for R&D spending of 211.93M, which is -0.07x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • The company's operating cash flow of (274.05M) shows concerning coverage of stock compensation expenses of 65.68M, with a -4.17 ratio indicating potential earnings quality issues.
  • Free cash flow of (274.64M) provides weak coverage of capital expenditures of 592000, with a -463.93 ratio suggesting additional external financing needs for growth initiatives.
  • Operating earnings of (350.89M) show weak coverage of depreciation charges of 6.70M, with a -52.41 ratio indicating high capital intensity and potential reinvestment needs.
  • Free cash flow of (274.64M) represents just -5.59x of debt issuance 49.14M, suggesting concerning reliance on leverage rather than internal cash generation for growth.

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 11.09 12.96
EV to Cash from Ops. EV/CFO -16.66 23.73
EV to Debt EV to Debt 41.49 772.65
EV to EBIT EV/EBIT -13.01 -11.30
EV to EBITDA EV/EBITDA -12.85 7.11
EV to Free Cash Flow [EV/FCF] EV/FCF -16.63 22.12
EV to Market Cap EV to Market Cap 0.98 68.89
EV to Revenue EV/Rev 0.00 199.70
Price to Book Value [P/B] P/B 19.02 22.62
Price to Earnings [P/E] P/E -13.19 -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 Int. cover (Qtr) -138.14 857.11
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -678.95 -27.24
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 268.76 747.06
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 0.01
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -57.70 -48.21
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -59.45 -2.09
EBIT Growth (1y) % EBIT 1y % (Qtr) -57.70 -57.79
EBT Growth (1y) % EBT 1y % (Qtr) -56.41 -14.35
EPS Growth (1y) % EPS 1y % (Qtr) -34.47 -30.88
FCF Growth (1y) % FCF 1y % (Qtr) -45.42 -32.51
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 0.00 227.96
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.00 0.14
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.00
Cash Ratio Cash Ratio (Qtr) 4.69 3.79
Current Ratio Curr Ratio (Qtr) 6.31 7.23
Debt to Equity Ratio Debt/Equity (Qtr) 0.45 0.42
Interest Cover Ratio Int Coverage (Qtr) -138.14 857.11
Times Interest Earned Times Interest Earned (Qtr) -138.14 857.11
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 0.00 -18,509.94
EBIT Margin % EBIT Margin % (Qtr) 0.00 -18,862.18
EBT Margin % EBT Margin % (Qtr) 0.00 -19,783.19
Gross Margin % Gross Margin % (Qtr) 0.00 -8.62
Net Profit Margin % Net Margin % (Qtr) 0.00 -19,732.60