Theratechnologies, Inc. – Value Analysis (US OTC:THERF) : December 29, 2017

Capitalcube gives Theratechnologies, Inc. a score of 54.

Our analysis is based on comparing Theratechnologies, Inc. with the following peers – Ono Pharmaceutical Co., Ltd. Unsponsored ADR, Ophthotech Corp., OPKO Health, Inc. and Onconova Therapeutics Inc. (OPHLY-US, OPHT-US, OPK-US and ONTX-US).

Investment Outlook

Theratechnologies, Inc. has a fundamental score of 54 and has a relative valuation of OVERVALUED.

Fundamental Score

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Company Overview

  • Considering peers, relative outperformance over the last year and the last month suggest a leading position.
  • It currently trades at a Price/Book ratio of (10.35).
  • The market expects faster earnings growth from THERF-US than from its peers and also a turnaround in its current ROE.
  • THERF-US has relatively low net profit margins while its asset efficiency is relatively high.
  • 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.
  • Over the last five years, THERF-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.
  • Compared with the peers chosen, THERF-US has had faster revenue growth in prior years and a current P/E ratio that suggests faster growth in the future suggesting superior growth expectations.
  • The company is likely overinvesting in a business with only median returns.

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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 ONTX-US.

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

  • THERF-US‘s interest coverage is less than (but within one standard deviation of) its five-year average interest coverage of 398.08x.
  • The decrease in its interest coverage to -3.48x from 1.67x (in 2016) was also accompanied by a decrease in its peer median during this period to 497.76x from 500.33x.
  • Interest coverage fell 2.507 points relative to peers. It is also below the 2.50x coverage benchmark unlike the peer median.

Access the detailed analysis for Theratechnologies, Inc.

Key Liquidity Items

Company Debt/Enterprise Value (%) Current Ratio Interest Coverage (x) Cash Flow To Total Debt (%)
Ono Pharmaceutical Co., Ltd. Unsponsored ADR 0.09 3.21 1492.95 6016.54
Ophthotech Corp. 1503.49 12.88 0 65.1
OPKO Health, Inc. 2.06 1.66 -28.52 -40.43
Onconova Therapeutics Inc. 0 0.97 No interest exp 999
Theratechnologies Inc. N/A 1.76 -3.48 -43.02
Peer Median 1.07 1.76 497.76 65.1
Best In Class 0.09 12.88 1492.95 6016.54

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Company Profile

Theratechnologies, Inc. is engaged in the development of therapeutic peptide products. It addresses unmet medical needs in metabolic disorders to promote healthy ageing. Its product EGRIFTA reduces excess abdominal fat in HIV-infected patients with lipodystrophy. The company was founded on October 19, 1993 and is headquartered in Montreal, Canada.

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