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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Denali Therapeutics Inc. (XNAS:DNLI) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
DNLI
Name:
DENALI THERAPEUTICS INC. (XNAS:DNLI)
Sector:
- 76150.00K
Industry:
Biotechnology
CEO:
Mr. Ryan Watts
Total Employees:
395
Our Technological Advancement Rating
Our Rating:
A
Technological advancement compared to industry is 45.84% higher
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF DENALI THERAPEUTICS INC.(DNLI) 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 ($) :
27.83
One Month Price Target:
$28.09
Six Month Price Target :
$29.42
Likely Price in One Year's Time:
Ticker:
$31.
Likely Trading Range Today Under (Normal Volatility)
$27.66
Price Upper limit ($) :
$28.09
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$25.25
This week:
$22.06
This month :
$16.29
Other Primary facts
Market Cap:
3.35B
Market Cap Classification:
Mid Cap
Number of Shares
IPO Date:
123.35M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
36.23%
-15.4%
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:
$39.80
$34.25
$15.86
$21.41
Medium risk (<10%) entry points
Buy Call
Sell Call
$32.45
Buy Put:
Sell Put:
$31.26
$23.20
$24.40
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
DNLI
Sharpe Ratio:
3.41%
Comparison:
DNLI, is amongst the top 20% stocks with highest risk-adjusted returns
Sharpe ratio is 75.24% higher than the industry
& ratio is 49.49% higher than the market/S&P 500 average
Average Returns/Yield of
DNLI
Daily returns:
0.17%
Weekly returns:
0.83%
Monthly returns:
3.31%
Yearly returns:
25.22%
Comparison of returns:
Average annual returns/yield (last 3 years) is 57.40% above industry average
Classification:
DNLI, is amongst the top 20% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.45
Statistical test of Returns:
DNLI has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
4.60%
Weekly Volatility:
10.28%
Monthly Volatility:
20.55%
Yearly Volatility:
71.19%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
1.76%
Volatility in last five trading days has been -61.65% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-9.27%
Weekly VaR:
-20.73%
Monthly VaR:
-41.47%
How Much Can the price of
DNLI
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-35%
Worst case (decline):
>85%
This translates to price declining to:
$18.15
This translates to price declining to:
$4.17
Severe Crash Probability
Risk of crash in next 6/12 months: Very high (>70%)
What is Value at Risk (VaR)?
Risk Fundamentals
DNLI is a 192.67% riskier investment compared to the market/S&P 500 & is 150.73% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -3.35% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
DNLI
Beta in relation to market/S&P 500--1.70
Expected beta in 1 year's time:
1.272
Expected beta in 3 year's time:
1.798
Unlevered (debt free) Beta:
1.597
Beta in relation to Nasdaq (XNAS):
1.213
Beta in relation to all global stocks::
0.901
Beta Comparison & Analysis
Beta of competitors/peers::
0.787
Beta is 115.66% higher than peers
Average Industry Beta:
1.152
Beta is 47.29% above industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
2.72%
Sustainable growth rate is -94.81% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
0.249
Alpha is 75.77% above industry average alpha yield
Alpha is 1587% higher than market/& is unsustainably high
Analysis of Cost of Capital of
DNLI
Equity cost of capital:
0.148
Equity cost of capital is 33.80% above industry mean WACC
Unlevered (without debt) cost of capital:
13.91%
Before-tax cost of debt:
-
After-tax cost of debt:
-
Overall debt rating:
-
Weighted average cost of capital (WACC):
-
-
Key Per-Share Metrics & Analysis
Revenue per share:
$0.67
Revenue growth rate per share of (3Y):
3.74
Annual revenue growth rate is -112.42% below industry average
EPS:
-$2.34
Expected Annual growth rate of EPS (3Y):
4.91%
Expected future EPS growth rate is -50.82% lower than the Biotechnology industry
Free cash flow (FCF) per share:
-
-
-
Debt per share
$0.46
EBITDA per share
-$2.25
Valuation Analysis Today of
DNLI
P/E Ratio:
874.09
P/E Ratio of Competitors/Peers:
154.52
P/E ratio is 465.70% higher than main peers & is 874.16% higher than the industry
-
DNLI is -113.25% undervalued if valued using industry average P/E ratio
-
-
P/S (Price to Sales ratio):
41.42
Price to sales ratio is 2.26% above the industry mean
P/B (Price to book value ratio):
3.74
-
Price to free cash flow ratio is -70.66% lower than the industry
Net income growth rate (3Y):
514.36%
Net income growth rate is 628.73% 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:
6.22%
Net debt to equity ratio:
-4.60%
Debt to assets ratio:
4.32%
Net debt to assets ratio:
-3.20%
Debt-to-asset ratio is -89.75% below industry average
Ability to repay debt:
Interest coverage ratio:
-
-
Looking forward:
Debt growth rate:
-7.05%
Annual debt growth is -105% 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:
0.421
Statistical significance of correlation:
DNLI has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.34
Stock price is 23.94% 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):
-0.073
Covariance of price movement with the market:
-0.194
Kurtosis
7.971
Returns have a significant fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are more probable, compared to assets with normally distributed returns
Skewness of returns:
1.07
Returns are right (positive) skewed; mean returns are greater than median and mode returns
Fundamental Analysis & Dupont Analysis of
DNLI
Gross Profit Margin Ratio:
-
Operating Profit Margin Ratio:
-351.15%
Operating profit margin is -18.09% lower than the industry
Net Profit Margin Ratio:
-
Effective Tax Rate:
0.20%
Effective tax rate is -96.48% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
-31.13%
Return on equity (ROE) is -45.70% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
-21.63%
Return on assets (ROA) is 6.04% higher than the industry
Financial Leverage:
1.0x
Current Ratio:
2.9
Current ratio is -64.22% below industry average
Cash Conversion Cycle (days):
0
-
The remaining useful life of property plant & equipment is: 1.6 years
Stock based compensation to net income ratio:
-9.15%
In-depth Efficiency Analysis
Revenue generated per employee:
209.8K
Each employee generates -87% less revenue than industry average revenue per employee
EBITDA generated per employee:
- 703.2K
Each employee generates -283% less EBITDA than industry average revenue per employee
Profit generated per employee:
- 723.4K
Each employee generates -665% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
- 192.8K
Each employee generates -231% less free cash flow than industry average revenue per employee
Assets/Capital per employee
841.6K
Each employee generates -231% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
Research & development (R&D) investment growth rate-- 24.80%
Growth rate in R&D investment/expenditure is -791.38% lower than the industry
Competitors/Peer firms of
DNLI
ACADIA HEALTHCARE COMPANY, INC. (XNAS:ACHC)
ULTRAGENYX PHARMACEUTICAL INC. (XNAS:RARE)
QUIDELORTHO CORPORATION (XNAS:QDEL)
HALOZYME THERAPEUTICS, INC. (XNAS:HALO)
PREMIER, INC. (XNAS:PINC)
ICU MEDICAL, INC. (XNAS:ICUI)
AMEDISYS, INC. (XNAS:AMED)
ZAI LAB LIMITED (XNAS:ZLAB)
ABCAM PLC (XNAS:ABCM)
Current Analyst Ratings
Strong buy�0%
Buy�13%
Hold�4%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Buy
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
82.88M
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:
-
-
291.24M
82.66M
82.66M
-
-
373.91M
3.41M
-
8.56M
- 277771.00K
- 291029.00K
- 285760.00K
- 286335.00K
- 575.00K
- 285760.00K
Statement of Cash Flow
Date:
Period:
2.08M
Differed Income Tax :
-
Stock Based Compensation :
26.15M
Change in Working Capital :
- 35957.00K
Accounts Receivables:
-
Other Working Capital:
- 30141.00K
Other Non-Cash Items:
844.00K
Net Cash Provided by Operating Activities:
- 72109.00K
Investments in PP&E:
- 4041.00K
Net Acquisitions:
-
Purchases of Investments:
- 364337.00K
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):
3/31/22
2022
Q1
104.95M
852.57M
957.52M
-
-
30.91M
988.44M
67.94M
-
-
250.27M
-
14.21M
332.42M
-
1.32B
3.36M
5.66M
-
290.63M
41.60M
341.24M
57.09M
379.00K
61.69M
-
402.93M
1.55M
- 710216.00K
- 9251.0K
1.64B
March 31, 2022 at 6:00:00 AM
373.91M
917.93M
1.32B
1.10B
62.75M
- 42208.0K
250.50M
-
- 117878.00K
-
-
-
-
1.46M
1.46M
-
- 188524.00K
106.45M
294.98M
- 72109.00K
- 4041.00K
- 76150.00K
Our Proprietary Portfolio Rating
Our Rating:
A+
Price Forecast/Expected Price in Next 5 Years of
DNLI
2023
2024
2025
2026
2027
$31.10
$34.64
$38.59
$42.99
$47.89