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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Arrowhead Pharmaceuticals, Inc. (XNAS:ARWR) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
ARWR
Name:
ARROWHEAD PHARMACEUTICALS, INC. (XNAS:ARWR)
Sector:
- 67125.00K
Industry:
Biotechnology
CEO:
Dr. Christopher Anzalone
Total Employees:
329
Our Technological Advancement Rating
Our Rating:
B
Technological advancement compared to industry is -11.85% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF ARROWHEAD PHARMACEUTICALS, INC.(ARWR) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND BIOTECHNOLOGY INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
39.42
One Month Price Target:
$39.73
Six Month Price Target :
$41.25
Likely Price in One Year's Time:
Ticker:
$43.08
Likely Trading Range Today Under (Normal Volatility)
$39.13
Price Upper limit ($) :
$39.72
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$35.88
This week:
$31.49
This month :
$23.57
Other Primary facts
Market Cap:
4.17B
Market Cap Classification:
Mid Cap
Number of Shares
IPO Date:
105.85M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
40.33%
-25.69%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$55.88
$48.38
$22.96
$30.46
Medium risk (<10%) entry points
Buy Call
Sell Call
$45.94
Buy Put:
Sell Put:
$44.34
$32.88
$34.50
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
ARWR
Sharpe Ratio:
0.13%
Comparison:
ARWR, is amongst the top 40% stocks with lowest risk-adjusted returns
Sharpe ratio is -93.11% lower than the industry
& is -94.12% lower than the market/S&P 500 average
Average Returns/Yield of
ARWR
Daily returns:
0.01%
Weekly returns:
0.07%
Monthly returns:
0.29%
Yearly returns:
25.22%
Comparison of returns:
Average annual returns/yield (last 3 years) is -85.99% below industry average
Classification:
ARWR, is amongst the top 40% lowest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.65
Statistical test of Returns:
ARWR has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
4.39%
Weekly Volatility:
9.81%
Monthly Volatility:
19.61%
Yearly Volatility:
67.93%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
4.37%
Volatility in last five trading days has been -0.42% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-8.99%
Weekly VaR:
-20.10%
Monthly VaR:
-40.21%
How Much Can the price of
ARWR
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-35%
Worst case (decline):
>85%
This translates to price declining to:
$25.47
This translates to price declining to:
$5.91
Severe Crash Probability
Risk of crash in next 6/12 months: Low (<25%)
What is Value at Risk (VaR)?
Risk Fundamentals
ARWR is a 183.80% riskier investment compared to the market/S&P 500 & is 143.13% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -7.77% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
ARWR
Beta in relation to market/S&P 500--1.38
Expected beta in 1 year's time:
0.953
Expected beta in 3 year's time:
1.347
Unlevered (debt free) Beta:
1.304
Beta in relation to Nasdaq (XNAS):
1.246
Beta in relation to all global stocks::
0.843
Beta Comparison & Analysis
Beta of competitors/peers::
1.119
Beta is 23.55% higher than peers
Average Industry Beta:
1.152
Beta is 20.07% above industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
-
-
Alpha provided | Alpha Analysis
Alpha provided:
-0.091
Alpha is -164.07% below industry average alpha yield
Alpha is -579% below the market average
Analysis of Cost of Capital of
ARWR
Equity cost of capital:
0.126
Equity cost of capital is 14.34% above industry mean WACC
Unlevered (without debt) cost of capital:
11.90%
Before-tax cost of debt:
4.16%
After-tax cost of debt:
3.29%
Overall debt rating:
Lower BB medium grade (Fifth highest grade)
Weighted average cost of capital (WACC):
3.29%
WACC is 35.10% above industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$2.49
Revenue growth rate per share of (3Y):
11.2
Annual revenue growth rate is 3.12% above the industry average
EPS:
-$1.09
Expected Annual growth rate of EPS (3Y):
0.00%
-
Free cash flow (FCF) per share:
-
-
-
Debt per share
$0.21
EBITDA per share
-$0.95
Valuation Analysis Today of
ARWR
P/E Ratio:
446.2
P/E Ratio of Competitors/Peers:
76.2
P/E ratio is 485.60% higher than main peers & is 397.28% higher than the industry
-
ARWR is -140.31% undervalued if valued using industry average P/E ratio
-
-
P/S (Price to Sales ratio):
15.84
Price to sales ratio is -60.89% below the industry mean
P/B (Price to book value ratio):
11.2
-
Price to free cash flow ratio is -2.70% lower than the industry
Net income growth rate (3Y):
108.54%
Net income growth rate is 53.78% higher than the average industry net income growth rate
Dividend Analysis
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Dividend History:
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
-
In-depth Debt & Leverage Analysis
Debt to equity ratio:
6.04%
Net debt to equity ratio:
-17.79%
Debt to assets ratio:
3.52%
Net debt to assets ratio:
-10.38%
Debt-to-asset ratio is -91.65% below industry average
Ability to repay debt:
Interest coverage ratio:
-95.9
Interest coverage ratio is -18.96% less than industry average
Looking forward:
Debt growth rate:
20.85%
Annual debt growth is -85% lower than industry average debt growth rate
Debt repayment rate in last quarter: 0.00%
Analysis of Key Statistics
Correlation of price movement with the market:
0.46
Statistical significance of correlation:
ARWR has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.34
Stock price is 35.39% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.34
Correlation of price movement with Nasdaq (^IXIC):
-0.02
Covariance of price movement with the market:
-0.051
Kurtosis
13.767
Returns have severe fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are considerably more likely, compared to assets with normally distributed returns
Skewness of returns:
0.98
Returns are right (positive) skewed; mean returns are greater than median and mode returns
Fundamental Analysis & Dupont Analysis of
ARWR
Gross Profit Margin Ratio:
-
Operating Profit Margin Ratio:
-44.99%
Operating profit margin is -89.50% lower than the industry
Net Profit Margin Ratio:
-
Effective Tax Rate:
0.00%
Effective tax rate is -100.03% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
-30.01%
Return on equity (ROE) is -47.66% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
-17.51%
Return on assets (ROA) is -14.18% lower than the industry
Financial Leverage:
1.0x
Current Ratio:
2.47
Current ratio is -69.50% below industry average
Cash Conversion Cycle (days):
0
-
The remaining useful life of property plant & equipment is: 14.2 years
Stock based compensation to net income ratio:
-21.92%
In-depth Efficiency Analysis
Revenue generated per employee:
800.7K
Each employee generates -50% less revenue than industry average revenue per employee
EBITDA generated per employee:
- 307.2K
Each employee generates -180% less EBITDA than industry average revenue per employee
Profit generated per employee:
- 339.8K
Each employee generates -366% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
- 204.0K
Each employee generates -239% less free cash flow than industry average revenue per employee
Assets/Capital per employee
912.6K
Each employee generates -239% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
Research & development (R&D) investment growth rate-- 60.11%
Growth rate in R&D investment/expenditure is -1775.47% lower than the industry
Competitors/Peer firms of
ARWR
SOTERA HEALTH COMPANY (XNAS:SHC)
SHOCKWAVE MEDICAL, INC. (XNAS:SWAV)
PT INOCYCLE TECHNOLOGY GROUP Tbk (XIDX:INOV)
ROIVANT SCIENCES LTD. (XNAS:ROIV)
R1 RCM HOLDCO INC. (XNAS:RCM)
HUTCHMED (CHINA) LIMITED (XNAS:HCM)
CHANGE HEALTHCARE INC. (XNAS:CHNG)
CureVac NV (XNAS:CVAC)
ARENA PHARMACEUTICALS, INC. (XNAS:ARNA)
Current Analyst Ratings
Strong buy�4%
Buy�0%
Hold�13%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Hold
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
263.42M
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
-
-
266.84M
114.60M
114.60M
-
497.00K
381.94M
2.21M
1.05M
9.67M
- 101080.00K
- 118519.00K
- 111804.00K
- 111802.00K
2.00K
- 111804.00K
Statement of Cash Flow
Date:
Period:
2.57M
Differed Income Tax :
-
Stock Based Compensation :
24.50M
Change in Working Capital :
- 25272.00K
Accounts Receivables:
10.11M
Other Working Capital:
- 26517.00K
Other Non-Cash Items:
- 280.00K
Net Cash Provided by Operating Activities:
- 61347.00K
Investments in PP&E:
- 5778.00K
Net Acquisitions:
-
Purchases of Investments:
- 65875.00K
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
12/31/21
2022
Q1
91.59M
238.55M
330.13M
150.00K
-
7.99M
338.28M
69.18M
-
13.24M
217.57M
-
273.00K
300.26M
-
638.54M
4.07M
2.83M
-
108.65M
21.49M
137.03M
22.49M
-
128.95M
-
265.98M
197.00K
- 707564.00K
- 108.0K
-
December 31, 2021 at 12:00:00 AM
381.94M
372.56M
638.54M
456.12M
25.32M
- 66272.0K
38.27M
-
- 33385.00K
-
-
-
-
1.89M
1.89M
-
- 92847.00K
91.59M
184.43M
- 61347.00K
- 5778.00K
- 67125.00K
Our Proprietary Portfolio Rating
Our Rating:
D
Price Forecast/Expected Price in Next 5 Years of
ARWR
2023
2024
2025
2026
2027
$43.22
$47.23
$51.62
$56.42
$61.66