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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Reata Pharmaceuticals, Inc. (XNAS:RETA) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
RETA
Name:
REATA PHARMACEUTICALS, INC. (XNAS:RETA)
Sector:
- 58473.00K
Industry:
Biotechnology
CEO:
Mr. J. Warren Huff
Total Employees:
346
Our Technological Advancement Rating
Our Rating:
B
Technological advancement compared to industry is 30.33% higher
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF REATA PHARMACEUTICALS, INC.(RETA) 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 ($) :
23.41
One Month Price Target:
$23.56
Six Month Price Target :
$24.32
Likely Price in One Year's Time:
Ticker:
$25.23
Likely Trading Range Today Under (Normal Volatility)
$23.18
Price Upper limit ($) :
$23.6
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$20.83
This week:
$17.65
This month :
$11.88
Other Primary facts
Market Cap:
816.06M
Market Cap Classification:
Small Cap
Number of Shares
IPO Date:
36.50M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
32.43%
-37.83%
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:
$35.38
$29.98
$11.44
$16.84
Medium risk (<10%) entry points
Buy Call
Sell Call
$28.22
Buy Put:
Sell Put:
$27.07
$18.58
$19.75
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
RETA
Sharpe Ratio:
-1.57%
Comparison:
RETA, is amongst the top 40% stocks with lowest risk-adjusted returns
Sharpe ratio is -180.62% lower than the industry
& is -168.77% lower than the market/S&P 500 average
Average Returns/Yield of
RETA
Daily returns:
-0.07%
Weekly returns:
-0.37%
Monthly returns:
-1.49%
Yearly returns:
25.22%
Comparison of returns:
Average annual returns/yield (last 3 years) is -171.00% below industry average
Classification:
RETA, is amongst the top 40% lowest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.74
Statistical test of Returns:
RETA has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
5.32%
Weekly Volatility:
11.91%
Monthly Volatility:
23.81%
Yearly Volatility:
82.49%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
6.03%
Volatility in last five trading days has been 13.34% above long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-11.01%
Weekly VaR:
-24.62%
Monthly VaR:
-49.24%
How Much Can the price of
RETA
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-44%
Worst case (decline):
>85%
This translates to price declining to:
$13.01
This translates to price declining to:
$3.51
Severe Crash Probability
Risk of crash in next 6/12 months: Low (<25%)
What is Value at Risk (VaR)?
Risk Fundamentals
RETA is a 247.51% riskier investment compared to the market/S&P 500 & is 197.71% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is 11.99% above industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
RETA
Beta in relation to market/S&P 500--1.16
Expected beta in 1 year's time:
0.701
Expected beta in 3 year's time:
0.991
Unlevered (debt free) Beta:
0.561
Beta in relation to Nasdaq (XNAS):
1.045
Beta in relation to all global stocks::
0.746
Beta Comparison & Analysis
Beta of competitors/peers::
1.167
Beta is -0.61% lower than peers
Average Industry Beta:
1.152
Beta is 0.71% above industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
-
-
Alpha provided | Alpha Analysis
Alpha provided:
-0.290
Alpha is -304.47% below industry average alpha yield
Alpha is -1846% below the market average
Analysis of Cost of Capital of
RETA
Equity cost of capital:
0.111
Equity cost of capital is 0.51% above industry mean WACC
Unlevered (without debt) cost of capital:
5.37%
Before-tax cost of debt:
35.66%
After-tax cost of debt:
28.17%
Overall debt rating:
Non-investment grade (junk/speculative grade
Weighted average cost of capital (WACC):
28.17%
WACC is 61.54% above industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$0.31
Revenue growth rate per share of (3Y):
6.69
Annual revenue growth rate is -114.60% below industry average
EPS:
-$8.35
Expected Annual growth rate of EPS (3Y):
-4.96%
Expected future EPS growth rate is -149.69% lower than the Biotechnology industry
Free cash flow (FCF) per share:
-
-
-
Debt per share
$3.74
EBITDA per share
-$6.92
Valuation Analysis Today of
RETA
P/E Ratio:
-
P/E Ratio of Competitors/Peers:
153.3
-
-
RETA is -103.12% undervalued if valued using industry average P/E ratio
-
-
P/S (Price to Sales ratio):
74.56
Price to sales ratio is 84.08% above the industry mean
P/B (Price to book value ratio):
6.69
-
-
Net income growth rate (3Y):
181.59%
Net income growth rate is 157.28% 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:
106.78%
Net debt to equity ratio:
-305.51%
Debt to assets ratio:
20.07%
Net debt to assets ratio:
-57.42%
Debt-to-asset ratio is -52.40% below industry average
Ability to repay debt:
Interest coverage ratio:
-5
Interest coverage ratio is -95.77% less than industry average
Looking forward:
Debt growth rate:
0.00%
-
Debt repayment rate in last quarter: 0.00%
Analysis of Key Statistics
Correlation of price movement with the market:
0.31
Statistical significance of correlation:
RETA has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.34
Stock price is -8.80% less 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):
-0.001
Covariance of price movement with the market:
-0.004
Kurtosis
12.124
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:
-0.317
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
RETA
Gross Profit Margin Ratio:
-
Operating Profit Margin Ratio:
-2215.13%
Operating profit margin is 416.73% higher than the industry
Net Profit Margin Ratio:
-
Effective Tax Rate:
0.13%
Effective tax rate is -97.68% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
-237.72%
Return on equity (ROE) is 314.63% higher than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
-44.68%
Return on assets (ROA) is 119.00% higher than the industry
Financial Leverage:
1.3x
Current Ratio:
12.32
Current ratio is 52.17% above industry average
Cash Conversion Cycle (days):
0
-
The remaining useful life of property plant & equipment is: 13.5 years
Stock based compensation to net income ratio:
-5.08%
In-depth Efficiency Analysis
Revenue generated per employee:
33.1K
Each employee generates -98% less revenue than industry average revenue per employee
EBITDA generated per employee:
- 729.6K
Each employee generates -289% less EBITDA than industry average revenue per employee
Profit generated per employee:
- 878.0K
Each employee generates -786% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
- 169.0K
Each employee generates -215% less free cash flow than industry average revenue per employee
Assets/Capital per employee
411.9K
Each employee generates -215% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
Research & development (R&D) investment growth rate-- -1.94%
Growth rate in R&D investment/expenditure is -45.91% lower than the industry
Competitors/Peer firms of
RETA
Procaps Group SA (XNAS:PROC)
ORTHOPEDIATRICS CORP. (XNAS:KIDS)
NATIONAL RESEARCH CORPORATION (XNAS:NRC)
CERUS CORPORATION (XNAS:CERS)
ORGANOGENESIS HOLDINGS INC. (XNAS:ORGO)
SYNDAX PHARMACEUTICALS, INC. (XNAS:SNDX)
ATAI Life Sciences NV (XNAS:ATAI)
MANNKIND CORPORATION (XNAS:MNKD)
LEMAITRE VASCULAR, INC. (XNAS:LMAT)
Current Analyst Ratings
Strong buy�25%
Buy�8%
Hold�0%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Strong buy
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
11.46M
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:
-
-
160.92M
103.14M
103.14M
-
1.24M
265.29M
-
50.48M
1.24M
- 252456.00K
- 253832.00K
- 303773.00K
- 304176.00K
- 403.00K
- 303773.00K
Statement of Cash Flow
Date:
Period:
308.00K
Differed Income Tax :
-
Stock Based Compensation :
15.44M
Change in Working Capital :
- 9966.00K
Accounts Receivables:
-
Other Working Capital:
- 893.00K
Other Non-Cash Items:
9.87M
Net Cash Provided by Operating Activities:
- 58185.00K
Investments in PP&E:
- 288.00K
Net Acquisitions:
-
Purchases of Investments:
-
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
531.98M
-
531.98M
-
-
5.36M
537.34M
142.38M
-
-
-
-
152.00K
142.53M
-
679.87M
9.02M
5.14M
-
755.00K
28.71M
43.62M
136.45M
372.02M
508.46M
-
552.08M
36.00K
- 1329473.00K
-
-
March 31, 2022 at 6:00:00 AM
265.29M
127.79M
679.87M
-
141.59M
- 390392.0K
-
-
- 288.00K
-
-
-
-
194.00K
194.00K
-
- 58279.00K
531.98M
590.26M
- 58185.00K
- 288.00K
- 58473.00K
Our Proprietary Portfolio Rating
Our Rating:
D
Price Forecast/Expected Price in Next 5 Years of
RETA
2023
2024
2025
2026
2027
$25.31
$27.28
$29.41
$31.70
$34.17