Terns Pharmaceuticals, Inc. (NASDAQ: TERN)

Sector: Healthcare Industry: Biotechnology CIK: 0001831363
Market Cap 3.50 Bn
P/B 12.31
P/E -37.03
P/S 0.00
ROIC (Qtr) -36.75
Div Yield % 0.00
Rev 1y % (Qtr) 0.00
Total Debt (Qtr) 1.03 Mn
Debt/Equity (Qtr) 0.00

About

Terns Pharmaceuticals, Inc., a clinical-stage biopharmaceutical company, operates in the healthcare sector, specifically focusing on developing small-molecule product candidates to address serious diseases such as oncology and obesity. Established in 2019, the company has already made significant strides in its field, receiving Orphan Drug Designation from the US Food and Drug Administration (FDA) for its leading product candidate, TERN-701, in the treatment of chronic myeloid leukemia (CML). Terns Pharmaceuticals' main business activities revolve...

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Price action

Investment thesis

Bull case

  • Healthy cash reserves of 150.70M provide 328.32x coverage of short-term debt 459000, demonstrating strong liquidity position and minimal refinancing risk.
  • Strong tangible asset base of 301.65M provides 293.15x coverage of total debt 1.03M, indicating robust asset backing and low credit risk.
  • Short-term investments of 144.94M provide solid 12.10x coverage of other current liabilities 11.98M, indicating strong liquidity.
  • Tangible assets of 301.65M provide robust 25.18x coverage of other current liabilities 11.98M, indicating strong asset backing.
  • Strong cash position of 150.70M provides 12.58x coverage of other current liabilities 11.98M, indicating excellent liquidity.

Bear case

  • Investment activities of (42.39M) provide weak support for R&D spending of 76.99M, which is -0.55x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • The company's operating cash flow of (77.68M) shows concerning coverage of stock compensation expenses of 13.07M, with a -5.94 ratio indicating potential earnings quality issues.
  • Operating cash flow of (77.68M) provides minimal -326.37x coverage of tax expenses of 238000, suggesting potential tax planning inefficiencies or unsustainable tax positions.
  • Operating earnings of (94.20M) show weak coverage of depreciation charges of 602000, with a -156.47 ratio indicating high capital intensity and potential reinvestment needs.
  • Retained earnings of (494.12M) provide limited buffer against comprehensive income items of 109000, which is -4533.18x, indicating elevated exposure to market risks.

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 11.11 12.96
EV to Cash from Ops. EV/CFO -43.15 23.73
EV to Debt EV to Debt 3,257.57 772.65
EV to EBIT EV/EBIT -35.59 -11.30
EV to EBITDA EV/EBITDA -31.07 7.11
EV to Free Cash Flow [EV/FCF] EV/FCF -43.15 22.12
EV to Market Cap EV to Market Cap 0.96 68.89
EV to Revenue EV/Rev 0.00 199.70
Price to Book Value [P/B] P/B 12.31 22.62
Price to Earnings [P/E] P/E -37.03 -12.30
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 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) 0.00 -27.24
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -44.21 747.06
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 0.01
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -7.22 -48.21
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -8.88 -2.09
EBIT Growth (1y) % EBIT 1y % (Qtr) -7.28 -57.79
EBT Growth (1y) % EBT 1y % (Qtr) -7.28 -14.35
EPS Growth (1y) % EPS 1y % (Qtr) 13.56 -30.88
FCF Growth (1y) % FCF 1y % (Qtr) -3.80 -32.51
Gross Profit Growth (1y) % Gross Profit Growth (1y) % 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) 9.79 3.79
Current Ratio Curr Ratio (Qtr) 19.52 7.23
Debt to Equity Ratio Debt/Equity (Qtr) 0.00 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) 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