CARA Therapeutics, Inc. – Value Analysis (NASDAQ:CARA) : July 4, 2017

Capitalcube gives CARA Therapeutics, Inc. a score of 25.

Our analysis is based on comparing CARA Therapeutics, Inc. with the following peers – Trevena, Inc., Johnson & Johnson, Recro Pharma, Inc., Depomed, Inc., Flexion Therapeutics, Inc., AcelRx Pharmaceuticals, Inc., Pfizer Inc., DURECT Corporation, Acorda Therapeutics, Inc. and Cumberland Pharmaceuticals Inc. (TRVN-US, JNJ-US, REPH-US, DEPO-US, FLXN-US, ACRX-US, PFE-US, DRRX-US, ACOR-US and CPIX-US).

Investment Outlook

CARA Therapeutics, Inc. has a fundamental score of 25 and has a relative valuation of OVERVALUED.

Fundamental Score

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Company Overview

  • With respect to peers, relative outperformance over the last year is in contrast to the more recent underperformance.
  • It currently trades at a Price/Book ratio of (4.61).
  • CARA-US‘s earnings and EBITDA are both negative which suggest that P/E or Price/EBITDA are not meaningful to make this analysis between operating advantage (ROE) and growth expectations (as suggested by P/E or P/EBITDA).
  • CARA-US‘s relatively low net margins and poor asset turns suggest a problematic operating strategy.
  • Compared with its chosen peers, the company’s annual revenues and earnings change at a slower rate, implying a lack of strategic focus and/or lack of execution success.
  • Over the last five years, CARA-US‘s return on assets has declined from about median to less than the median among its peers suggesting that the company’s historical competitiveness in operations is slipping away.
  • CARA-US‘s earnings and EBITDA are both negative which suggest that P/E or Price/EBITDA are not meaningful for an analysis between historical growth (using annualized three-year revenue growth) and investor growth expectations (as suggested by P/E or Price/EBITDA) .
  • The company’s capital investment program and to-date returns suggest that the company is likely making big bets on the future.
  • CARA-US currently does not have any debt.

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Leverage & Liquidity

CARA-US currently does not have any debt.

  • We consider the company to have a Quick & Able profile as it currently does not have any debt. In comparison, the median level of debt as percent of enterprise value for its peer group is currently 18.11%.
  • All 10 peers for the company have an outstanding debt balance.

Access the detailed analysis for CARA Therapeutics, Inc.

Key Liquidity Items

Company Debt/Enterprise Value (%) Current Ratio Interest Coverage (x) Cash Flow To Total Debt (%)
Trevena, Inc. 19.99 9.13 -56.25 -421.38
Johnson & Johnson 9.85 2.52 26.52 68.03
Recro Pharma, Inc. 18.11 5.97 -3.23 -42.57
Depomed, Inc. 55.17 0.95 0.22 10.59
Flexion Therapeutics, Inc. 4.28 10.57 -36.56 -232.12
AcelRx Pharmaceuticals, Inc. 57.92 6.11 -2.82 -32.33
Pfizer Inc. 18.81 1.44 11.26 36.52
DURECT Corporation 13.05 3.35 -14.15 -157.14
Acorda Therapeutics, Inc. 27.83 2.08 -0.72 7.19
Cumberland Pharmaceuticals Inc. 6.31 4.52 -13.52 76.19
Cara Therapeutics Inc 0 3.28 No interest exp 999
Peer Median 18.11 3.35 -2.82 7.19
Best In Class 4.28 10.57 No interest exp 999

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Company Profile

CARA Therapeutics, Inc. is a clinical-stage company, which engages in the research, development, and commercialization of pharmaceutical products. Its portfolio includes opioid-based products, anesthetic-based drugs, and analgesics that targets to alleviate itch and pain. The company was founded by Derek T. Chalmers, Michael E. Lewis, and Frédérique Menzaghi on July 2, 2004 and is headquartered in Stamford, CT.


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