Design Therapeutics (DSGN) AI Stock Analysis

• Market Cap: $558.24M
• Dividend Yield: N/A
• Average Volume (3M): 213.56K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.26
• Revenue Growth: N/A
• EPS Growth: -40.26%
• Country: US
• Employees: 56
• Sector: Healthcare
• Sector Strength: 45
• Industry: Biotechnology
• EPS (TTM): -0.30
• Shares Outstanding: 56,963,757
• 10 Day Avg. Volume: 267,018
• 30 Day Avg. Volume: 213,565
• PEG Ratio: 0.27
• Price to Book (P/B): 1.44
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -8.04
• Enterprise Value/Market Cap: 0.00
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: 0.00
• Enterprise Value/Ebitda: 0.00
• 1Y Price Target: $15.00
• Price Target Upside: 67.79% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 4
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 55 Neutral
• Price Target: $10.00 ▲(11.86% Upside)

The score is held back primarily by weak financial performance (no revenue, persistent losses, and significant cash burn), partially offset by a strong balance sheet with minimal leverage. Technical indicators are supportive and lift the score, while valuation remains uncertain due to negative earnings and no dividend data.

Positive Factors

Strong Balance Sheet

A strong balance sheet with low debt provides financial stability, allowing the company to invest in R&D and weather financial challenges over the long term.

Innovative GeneTAC Platform

The GeneTAC platform positions the company as an innovator in targeting genetic diseases, potentially leading to breakthrough therapies and long-term market leadership.

Strategic Investment

The investment by Point72 Asset Management signals confidence in the company's long-term potential, providing financial backing and market credibility.

Negative Factors

Lack of Revenue

The absence of revenue generation poses a significant challenge, limiting cash flow and increasing reliance on external funding to sustain operations and growth.

Persistent Losses

Ongoing operating losses indicate challenges in achieving profitability, which can strain resources and hinder long-term financial sustainability.

Negative Cash Flow

Negative cash flow reflects the inability to cover operational expenses, potentially leading to liquidity issues and limiting the ability to invest in future growth.

Design Therapeutics Business Overview & Revenue Model

Company Description

Design Therapeutics (DSGN) is a biotechnology company focused on developing novel therapies for serious degenerative diseases caused by nucleotide repeat expansions. The company operates within the pharmaceutical and biotechnology sectors, leveraging its GeneTAC platform to design small-molecule treatments that target the underlying genetic causes of these diseases. Design Therapeutics aims to address unmet medical needs in conditions such as Friedreich ataxia and other similar genetic disorders.

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

Financial profile is mixed: a strong, low-leverage balance sheet (very low debt vs. equity) is a clear positive, but operating fundamentals are weak with zero revenue, sizable ongoing losses, and material cash burn (TTM operating cash flow and free cash flow around -$52M).

Income Statement

Income statement quality remains weak. The company reports no revenue across annual periods and TTM (Trailing-Twelve-Months), while operating losses are sizable (TTM EBIT of about -$78.0M; net loss about -$67.4M). Losses improved versus 2023 on an annual basis (2024 net loss about -$49.6M vs. -$66.9M in 2023), but TTM results show losses widening again versus 2024, highlighting an uneven cost trajectory and limited visibility to self-sustaining operations.

Balance Sheet

Balance sheet strength is a clear positive. Leverage is minimal (TTM total debt ~$1.7M vs. equity ~$199.7M; very low debt-to-equity), reducing refinancing risk and preserving financial flexibility. The main drawback is ongoing losses translating into negative returns on equity (TTM return on equity about -27%), and equity has trended down from 2021 to TTM, consistent with continued cash burn and accumulated deficits.

Cash Flow

Cash flow remains pressured by sustained operating burn. TTM operating cash flow is about -$52.3M and free cash flow about -$52.4M, indicating the business is still funding operations with cash reserves and/or financing rather than internal generation. A relative positive is that free cash flow broadly tracks reported net loss (TTM free cash flow roughly in line with net income magnitude), suggesting losses are not heavily driven by non-cash items; however, the absolute level of cash burn remains high and volatile year to year.

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	0.00
Gross Profit	-14.90M	-596.00K	-537.00K	-466.00K	0.00	-5.00K
EBITDA	-72.58M	-48.99M	-66.33M	-62.84M	-35.70M	-8.28M
Net Income	-67.45M	-49.59M	-66.86M	-63.31M	-35.53M	-8.28M
Balance Sheet
Total Assets	211.77M	252.09M	289.64M	341.14M	390.56M	36.52M
Cash, Cash Equivalents and Short-Term Investments	205.97M	245.48M	281.80M	330.39M	384.06M	36.09M
Total Debt	1.74M	2.33M	3.05M	3.69M	3.63M	0.00
Total Liabilities	12.05M	10.00M	11.96M	13.83M	8.43M	47.83M
Stockholders Equity	199.72M	242.10M	277.69M	327.31M	382.13M	-11.31M
Cash Flow
Free Cash Flow	-52.41M	-43.45M	-58.82M	-52.23M	-30.91M	-8.74M
Operating Cash Flow	-52.25M	-43.10M	-58.56M	-51.32M	-29.38M	-8.67M
Investing Cash Flow	36.33M	43.95M	52.54M	-220.99M	-53.64M	-33.56M
Financing Cash Flow	684.00K	513.00K	724.00K	235.00K	379.21M	44.53M

Design Therapeutics Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 8.94
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DSGN, the sentiment is Positive. The current price of 8.94 is below the 20-day moving average (MA) of 9.42, above the 50-day MA of 8.83, and above the 200-day MA of 5.73, indicating a neutral trend. The MACD of 0.15 indicates Positive momentum. The RSI at 51.25 is Neutral, neither overbought nor oversold. The STOCH value of 69.42 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for DSGN.

Design Therapeutics Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
LXEO	58 Neutral	$563.46M	-2.78	-80.69%	―	―	4.97%
ANNX	56 Neutral	$966.79M	-4.38	-83.98%	―	―	-35.62%
DSGN	55 Neutral	$558.24M	-7.89	-29.83%	―	―	-40.26%
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%
ASMB	49 Neutral	$506.78M	-6.23	-36.94%	―	31.30%	32.79%
KRRO	42 Neutral	$84.76M	-0.93	-63.46%	―	―	21.61%
AURA	42 Neutral	$334.03M	-2.65	-64.26%	―	―	-11.41%