Design Therapeutics (DSGN) AI Stock Analysis

• Market Cap: $227.64M
• Dividend Yield: N/A
• Average Volume (3M): 104.70K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.96
• Revenue Growth: N/A
• EPS Growth: 26.63%
• Country: US
• Employees: 56
• Sector: Healthcare
• Sector Strength: 44
• Industry: Biotechnology
• EPS (TTM): -0.31
• Shares Outstanding: 56,768,677
• 10 Day Avg. Volume: 100,176
• 30 Day Avg. Volume: 104,698
• PEG Ratio: 0.00
• Price to Book (P/B): -309.75
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -8.12K
• Enterprise Value/Market Cap: 4.96
• Enterprise Value/Revenue: 673.47
• Enterprise Value/Gross Profit: -7.48K
• Enterprise Value/Ebitda: -4.47
• 1Y Price Target: $8.50
• Price Target Upside: 117.95% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 3

• Rating: 47 Neutral
• Price Target: ―

Design Therapeutics has significant financial challenges due to its lack of revenue and profitability, which heavily weighs on its score. Despite a strong balance sheet and positive technical indicators suggesting short-term momentum, the negative valuation metrics and absence of earnings diminish its overall appeal. The stock is risky and reliant on future revenue growth for improvement.

Positive Factors

Clinical Trial Progress

The first Friedreich's ataxia patient has been dosed in the Phase 1/2 RESTORE-FA study of DT-216P2.

Financial Stability

DSGN reported $229.7M in cash and equivalents, expected to fund operating expenses into 2029.

Product Development

DSGN's new product candidate, DT-216P2, contains a novel proprietary excipient which has addressed previous safety and PK issues in animal models.

Negative Factors

Program Delays

The US clinical hold could add to the delays seen in the program.

Regulatory Approval

DSGN continues to progress preclinical activities for their myotonic dystrophy type 1 program and expects to select a candidate later in 2025.

Regulatory Challenges

A clinical hold notice was received from the FDA in response to the IND submission, citing nonclinical deficiencies.

Design Therapeutics Business Overview & Revenue Model

Company Description

Design Therapeutics, Inc. a preclinical-stage biopharmaceutical company, engages in the development of therapies for the treatment of genetic diseases caused by nucleotide repeat expansions. The company's portfolio of products comprises Friedreich Ataxia, a monogenic, autosomal recessive, progressive multi-system disease that affects organ systems dependent on mitochondrial function, eventually leading to neurological, cardiac, and metabolic dysfunction; and Myotonic Dystrophy Type-1 (DM1), a dominantly-inherited, monogenic progressive neuromuscular disease affecting skeletal muscle, heart, brain, and other organs. It is also developing GeneTAC product candidate portfolio for the treatment of other nucleotide repeat expansion-driven monogenic diseases, such as Fragile X syndrome, spinocerebellar ataxias, amyotrophic lateral sclerosis, frontotemporal dementia, Huntington disease, and spinobulbar muscular atrophy. Design Therapeutics, Inc. was incorporated in 2017 and is headquartered in Carlsbad, California.

How the Company Makes Money

Design Therapeutics makes money primarily through the development and eventual commercialization of its therapeutic products. The company invests in research and development to advance its small-molecule therapies through clinical trials, with the goal of obtaining regulatory approval. Revenue is generated from potential future product sales, licensing agreements, and strategic partnerships. These collaborations may involve upfront payments, milestone payments, and royalties based on sales of approved products. Additionally, the company may receive funding from grants or other financial support aimed at advancing its research initiatives.

Design Therapeutics Financial Statement Overview

Summary

Design Therapeutics faces significant financial challenges, primarily due to its inability to generate revenue. While the balance sheet shows a strong cash position and low debt, the persistent losses and negative cash flows present substantial risks. Achieving revenue growth and improving operational efficiency are crucial for future financial health.

Income Statement

Design Therapeutics shows no revenue generation over recent years, leading to negative profitability metrics. The company consistently reports operating losses, reflected by negative EBIT and net income. The absence of revenue growth and persistent negative margins indicate significant challenges in achieving profitability.

Balance Sheet

The company maintains a healthy equity position with low debt, as evidenced by a favorable debt-to-equity ratio. However, continuous operating losses have eroded equity over time. The high equity ratio is a positive sign of financial stability, but the lack of revenue generation poses a risk to long-term sustainability.

Cash Flow

Operating cash flow remains negative, mirroring the income statement's lack of profitability. Free cash flow is also negative, which could indicate difficulties in covering operational expenses. Nonetheless, the company has sufficient cash reserves, providing some buffer against cash flow shortages in the short term.

Breakdown
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
0.00	0.00	0.00	0.00	0.00	226.00
	Gross Profit
-151.00K	0.00	-537.00K	-466.00K	-129.00K	-4.77K
	EBIT
-68.40M	-62.38M	-78.19M	-67.59M	-35.83M	-8.33M
	EBITDA
-67.79M	-48.99M	-66.33M	-62.84M	-35.70M	-8.32M
	Net Income Common Stockholders
-56.20M	-49.59M	-66.86M	-58.62M	-35.53M	-8.28M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
229.67M	245.48M	281.80M	330.39M	384.06M	36.09M
	Total Assets
237.47M	252.09M	289.64M	341.14M	390.56M	36.52M
	Total Debt
2.14M	2.33M	3.05M	3.69M	3.63M	0.00
	Net Debt
-11.53M	-20.23M	-18.15M	-22.81M	-294.94M	-2.38M
	Total Liabilities
9.56M	10.00M	11.96M	13.83M	8.43M	47.83M
	Stockholders Equity
227.92M	242.10M	277.69M	327.31M	382.13M	-11.31M
Cash Flow		Free Cash Flow
-47.67M	-43.45M	-58.82M	-52.23M	-30.91M	-8.74M
	Operating Cash Flow
-47.45M	-43.10M	-58.56M	-51.32M	-29.38M	-8.67M
	Investing Cash Flow
31.21M	43.95M	52.54M	-220.99M	-53.64M	-33.56M
	Financing Cash Flow
516.00K	513.00K	724.00K	235.00	379.21K	44.53M

Design Therapeutics Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 3.90
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DSGN, the sentiment is Negative. The current price of 3.9 is above the 20-day moving average (MA) of 3.84, above the 50-day MA of 3.74, and below the 200-day MA of 4.89, indicating a neutral trend. The MACD of 0.04 indicates Negative momentum. The RSI at 50.82 is Neutral, neither overbought nor oversold. The STOCH value of 37.16 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for DSGN.

Design Therapeutics Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
FHTX	54 Neutral	$258.08M	―	322.49%	―	-30.66%	36.48%
Sector *	54 Neutral	$5.38B	3.40	-45.06%	3.28%	16.75%	-0.02%
FDMT	48 Neutral	$207.07M	―	-32.97%	―	―	―
DSGN	47 Neutral	$227.64M	―	-22.59%	―	―	26.63%
TERN	45 Neutral	$354.59M	―	-32.12%	―	―	10.98%
ANNX	38 Underperform	$289.65M	―	-66.13%	―	―	43.21%
NGNE	34 Underperform	$307.78M	―	-34.97%	―	―	-140.77%

Design Therapeutics Corporate Events

Design Therapeutics Updates Corporate Presentation for Investors

Design Therapeutics, Inc. has updated its corporate presentation to be used in meetings with investors, analysts, and others, which has been attached to a Current Report on Form 8-K. This update, although furnished for informational purposes, is not deemed filed under the Securities Exchange Act or the Securities Act, thus limiting its formal legal implications.