It hasn't been a great afternoon session for Apellis Pharmaceuticals investors, who have watched their shares sink by -1.5% to a price of $86.08. Some of you might be wondering if it's time to buy the dip. If you are considering this, make sure to check the company's fundamentals first to determine if the shares are fairly valued at today's prices.
Apellis Pharmaceuticals Has Elevated P/B and P/E Ratios:
Apellis Pharmaceuticals, Inc., a commercial-stage biopharmaceutical company, focuses on the discovery, development, and commercialization of therapeutic compounds through the inhibition of the complement system for autoimmune and inflammatory diseases. The company belongs to the Health Care sector, which has an average price to earnings (P/E) ratio of 24.45 and an average price to book (P/B) ratio of 4.16. In contrast, Apellis Pharmaceuticals has a trailing 12 month P/E ratio of -13.9 and a P/B ratio of 24.27.
When we divide Apellis Pharmaceuticals's P/E ratio by its expected EPS growth rate of the next five years, we obtain its PEG ratio of -0.49. Since it's negative, the company has negative growth expectations, and most investors will probably avoid the stock unless it has an exceptionally low P/E and P/B ratio.
An Exceptionally Strong Balance Sheet:
| 2019-12-31 | 2020-12-31 | 2021-12-31 | 2022-12-31 | |
|---|---|---|---|---|
| Revenue (k) | $0 | $250,646 | $66,563 | $75,422 |
| Operating Margins | n/a | -85.3% | -805.7% | -788.4% |
| Net Margins | n/a | -137.59% | -1121.27% | -864.7% |
| Net Income (k) | -$304,707 | -$344,874 | -$746,354 | -$652,172 |
| Net Interest Expense (k) | -$176 | -$25,773 | -$12,823 | -$23,712 |
| Depreciation & Amort. (k) | -$240 | -$637 | -$1,492 | -$1,487 |
| Earnings Per Share | -$4.9 | -$4.59 | -$8.84 | -$6.19 |
| EPS Growth | n/a | 6.33% | -92.59% | 29.98% |
| Diluted Shares (k) | 62,229 | 75,163 | 84,421 | 116,457 |
| Free Cash Flow (k) | -$212,829 | -$165,910 | -$564,229 | -$515,269 |
| Capital Expenditures | -$1,693 | -$5,422 | -$1,103 | -$1,524 |
| Net Current Assets (k) | $18,079 | $161,180 | $140,944 | $129,178 |
| Current Ratio | 5.67 | 7.15 | 6.25 | 4.29 |
| Long Term Debt (k) | $142,567 | $358,830 | $189,024 | $92,736 |
| LT Debt to Equity | 4.17 | 1.75 | 0.95 | 0.55 |
Apellis Pharmaceuticals has consistently negative margins with a positive growth rate, declining EPS growth, and negative and highly variable cash flows. On the other hand, the company benefits from growing revenues and a flat capital expenditure trend and an excellent current ratio. Furthermore, Apellis Pharmaceuticals has an average amount of debt.
