Reata Pharmaceuticals, Inc. – Value Analysis (NASDAQ:RETA) : October 30, 2017

Capitalcube gives Reata Pharmaceuticals, Inc. a score of 50.

Our analysis is based on comparing Reata Pharmaceuticals, Inc. with the following peers – OrganiGram Holdings Inc, Ohr Pharmaceutical, Inc., Oragenics, Inc. and OncoCyte Corp. (OGI-CA, OHRP-US, OGEN-US and OCX-US).

Investment Outlook

Reata Pharmaceuticals, Inc. has a fundamental score of 50 and has a relative valuation of NEUTRAL.

Fundamental Score

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Company Overview

  • Considering peers, relative outperformance over the last year and the last month suggest a leading position.
  • Reata Pharmaceuticals, Inc. Class A currently has a negative book value but trades at a higher Price/Asset ratio (7.89) than its peer median (4.01).
  • 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.
  • 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.
  • 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 3 of the stocks have an outstanding debt balance. Companies with no debt include OGI-CA.

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.
  • Relative to peers, debt-EV rose 1.45 percentage points (and is now higher than its peer median).

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 (%)
OrganiGram Holdings Inc 1.74 13.98 -25.31 -145.36
Ohr Pharmaceutical, Inc. 0.88 3.31 -502.17 -10064.85
Oragenics, Inc. 14.14 4.18 -132.9 -470.93
OncoCyte Corp. 1.81 2.19 -137.97 -439.06
Reata Pharmaceuticals, Inc. Class A 2.99 1.34 0 -92.59
Peer Median 1.81 3.31 -135.44 -439.06
Best In Class 0.88 13.98 -25.31 -92.59

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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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