It's been a great morning session for Intra-Cellular Therapies investors, who saw their shares rise 2.9% to a price of $74.11 per share. At these higher prices, is the company still fairly valued? If you are thinking about investing, make sure to check the company's fundamentals before making a decision.
Intra-Cellular Therapies's Valuation Is in Line With Its Sector Averages:
Intra-Cellular Therapies, Inc., a biopharmaceutical company, focuses on the discovery, clinical development, and commercialization of small molecule drugs that address medical needs primarily in neuropsychiatric and neurological disorders by targeting intracellular signaling mechanisms in the central nervous system (CNS) in the United States. The company belongs to the Health Care sector, which has an average price to earnings (P/E) ratio of 30.21 and an average price to book (P/B) ratio of 4.08. In contrast, Intra-Cellular Therapies has a trailing 12 month P/E ratio of -50.8 and a P/B ratio of 12.08.
When we divide Intra-Cellular Therapies's P/E ratio by its expected EPS growth rate of the next five years, we obtain its PEG ratio of -1.05. 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.
Negative Cash Flows:
| 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | |
|---|---|---|---|---|---|---|
| Revenue (k) | n/a | $61 | $22,813 | $83,803 | $250,314 | $464,370 |
| Operating Margins | n/a | -254090.0% | -1014.0% | -341.0% | -105.0% | -34.0% |
| Net Margins | n/a | -243714.0% | -994.0% | -339.0% | -102.0% | -30.0% |
| Net Income (k) | -$155,127 | -$147,722 | -$227,006 | -$284,126 | -$256,256 | -$139,674 |
| Diluted Shares (k) | 54,708 | 55,186 | 70,365 | 81,253 | 94,047 | 95,882 |
| Earnings Per Share | -$2.84 | -$2.68 | -$3.23 | -$3.5 | -$2.72 | -$1.46 |
| EPS Growth | n/a | 5.63% | -20.52% | -8.36% | 22.29% | 46.32% |
| Avg. Price | $19.21 | $11.78 | $22.78 | $37.14 | $54.41 | $73.545 |
| P/E Ratio | -6.76 | -4.4 | -7.05 | -10.61 | -20.0 | -50.37 |
| Free Cash Flow (k) | -$118,560 | -$128,684 | -$230,340 | -$259,869 | -$270,964 | -$124,468 |
| CAPEX (k) | $391 | $700 | $267 | $325 | $778 | $269 |
| Current Ratio | 9.79 | 6.36 | 18.75 | 8.76 | 8.87 | 5.41 |
Intra-Cellular Therapies has an excellent current ratio of 5.41, rapidly growing revenues and decreasing reinvestment in the business, and a strong EPS growth trend. However, the firm has negative cash flows. Finally, we note that Intra-Cellular Therapies has weak operating margins with a positive growth rate.
