CymaBay Therapeutics, Inc. – Value Analysis (NASDAQ:CBAY) : December 4, 2017

Capitalcube gives CymaBay Therapeutics, Inc. a score of 13.

Our analysis is based on comparing CymaBay Therapeutics, Inc. with the following peers – Pfizer Inc., Galena Biopharma, Inc., PTC Therapeutics, Inc., Bristol-Myers Squibb Company and Xencor, Inc. (PFE-US, GALE-US, PTCT-US, BMY-US and XNCR-US).

Investment Outlook

CymaBay Therapeutics, Inc. has a fundamental score of 13 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’s current Price/Book of 4.42 is about median in its peer group.
  • CBAY-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).
  • CBAY-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, CBAY-US‘s return on assets has eroded from above median to below median among its peers suggesting declining relative operating performance.
  • The company’s relatively low level of capital investment and below peer median returns on capital suggest that the company is in maintenance mode.
  • CBAY-US‘s operating performance may not allow it to raise additional debt.

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Leverage & Liquidity

CBAY-US would seem to have a hard time raising additional debt.

  • With debt at 27.18% of its enterprise value compared to an overall benchmark of 25% (Note: The peer median is currently 22.74%), and relatively tight interest coverage level of -20.15x, CBAY-US would have a hard time raising much additional debt.
  • Of the 5 chosen peers for the company, only 4 of the stocks have an outstanding debt balance. Companies with no debt include XNCR-US.

CBAY-US has maintained its relatively low liquidity profile from the recent year-end.

  • CBAY-US‘s interest coverage is similar to its five-year average interest coverage of -20.63x.
  • The decrease in its interest coverage to -20.15x from -19.14x (in 2016) was also accompanied by a decrease in its peer median during this period to -7.28x from 1.18x.
  • Interest coverage rose 7.45 points relative to peers.
  • CBAY-US‘s debt-EV is less than (but within one standard deviation of) its five-year average debt-EV of 52.00%.
  • Compared to 2016, debt-EV has remained relatively stable for both the company (27.18%) and the peer median (22.74%).

Access the detailed analysis for CymaBay Therapeutics, Inc.

Key Liquidity Items

Company Debt/Enterprise Value (%) Current Ratio Interest Coverage (x) Cash Flow To Total Debt (%)
Pfizer Inc. 18.3 1.43 10.92 40.02
Galena Biopharma, Inc. 167.98 0.95 -5.77 -281.98
PTC Therapeutics, Inc. 41.04 3.08 -8.79 -38.63
Bristol-Myers Squibb Company 7.98 1.59 25.37 73.59
Xencor, Inc. 0 2.17 -16569 999
CymaBay Therapeutics, Inc. 27.18 7.39 -20.15 -271.79
Peer Median 22.74 1.88 -7.28 0.7
Best In Class 7.98 7.39 25.37 999

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Company Profile

CymaBay Therapeutics, Inc. is a clinical stage company, which engages in the research and development of biopharmaceutical products. Its candidates include MBX-8025 and Arhalofenate, MBX-8025 aims to treat lipid and liver diseases while Arhalofenate intends to reduce gout flares and serum uric acid. The company was founded on October 5, 1988 and is headquartered in Newark, CA.

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