Reata Pharmaceuticals, Inc. – Value Analysis (NASDAQ:RETA) : August 15, 2017

Capitalcube gives Reata Pharmaceuticals, Inc. a score of 56.

Our analysis is based on comparing Reata Pharmaceuticals, Inc. with the following peers – OncoMed Pharmaceuticals, Inc., Omeros Corporation, Onconova Therapeutics Inc. and Omni Bio Pharmaceutical, Inc. (OMED-US, OMER-US, ONTX-US and OMBP-US).

Investment Outlook

Reata Pharmaceuticals, Inc. has a fundamental score of 56 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.
  • Reata Pharmaceuticals, Inc. Class A currently has a negative book value but trades at a higher Price/Asset ratio (4.59) than its peer median (1.16).
  • RETA-US‘s book value of equity is not positive and suggests that that it is not meaningful to analyze its ROE versus P/E in order to determine whether the company has an operating or growth advantage.
  • RETA-US has a successful operating model with relatively high net profit margins and asset turns.
  • Changes in annual revenues are in line with its chosen peers but lags in terms of earnings suggesting that the company is less cost conscious and may be spending for growth.
  • RETA-US‘s return on assets currently and over the past five years suggest that its relatively high operating returns are sustainable.

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Leverage & Liquidity

  • Of the 4 chosen peers for the company, only 2 of the stocks have an outstanding debt balance. Companies with no debt include OMED-US and ONTX-US.

RETA-US has maintained its Constrained profile from the recent year-end.

  • RETA-US‘s debt-EV is its highest relative to the last five years and compares to a low of 0% in 2016.

Access the detailed analysis for Reata Pharmaceuticals, Inc.

Key Liquidity Items

Company Debt/Enterprise Value (%) Current Ratio Interest Coverage (x) Cash Flow To Total Debt (%)
OncoMed Pharmaceuticals, Inc. 0 3.39 No interest exp 999
Omeros Corporation 8.73 2.14 -4.87 -50.18
Onconova Therapeutics Inc. 0 1.66 No interest exp 999
Omni Bio Pharmaceutical, Inc. 19.05 0.58 -1.52 -72.44
Reata Pharmaceuticals, Inc. Class A 4.45 1.67 0 -88.72
Peer Median 4.45 1.67 498.74 -50.18
Best In Class 4.45 3.39 No interest exp 999

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Company Profile

Reata Pharmaceuticals, Inc. is a clinical stage biopharmaceutical company, which engages in identifying, developing, and commercializing pharmaceutical products. Its products include cardiovascular, rare diseases, immune-oncology, and ophthalmology. The company was founded by J. Warren Huff on September 1, 2002 and is headquartered in Irving, TX.


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