Design Therapeutics (DSGN) AI Stock Analysis

• Market Cap: $293.85M
• Dividend Yield: N/A
• Average Volume (3M): 111.75K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.94
• Revenue Growth: N/A
• EPS Growth: -24.60%
• Country: US
• Employees: 56
• Sector: Healthcare
• Sector Strength: 41
• Industry: Biotechnology
• EPS (TTM): -0.34
• Shares Outstanding: 56,948,128
• 10 Day Avg. Volume: 161,667
• 30 Day Avg. Volume: 111,750
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: -0.08
• Enterprise Value/Revenue: -38.63
• Enterprise Value/Gross Profit: 133.61
• Enterprise Value/Ebitda: 0.31
• 1Y Price Target: $5.00
• Price Target Upside: -3.10% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 2

• 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 Trials

The first Friedreich's ataxia patient has been dosed in the Phase 1/2 RESTORE-FA study of DT-216P2, marking a significant step forward in clinical trials.

Financial Stability

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

Safety and Efficacy

The new candidate DT-216P2 has demonstrated favorable safety and improved pharmacokinetics in initial data from the ongoing Phase 1 SAD study.

Negative Factors

Program Delays

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

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 (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

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	588.00K	0.00	0.00	0.00	0.00	226.00
Gross Profit	-170.00K	-596.00K	-537.00K	-466.00K	-129.00K	-4.77K
EBITDA	-74.47M	-48.99M	-66.33M	-62.84M	-35.70M	-8.32M
Net Income	-63.49M	-49.59M	-66.86M	-63.31M	-35.53M	-8.28M
Balance Sheet
Total Assets	222.89M	252.09M	289.64M	341.14M	390.56M	36.52M
Cash, Cash Equivalents and Short-Term Investments	216.28M	245.48M	281.80M	330.39M	384.06M	36.09M
Total Debt	1.10M	2.33M	3.05M	3.69M	3.63M	0.00
Total Liabilities	9.85M	10.00M	11.96M	13.83M	8.43M	47.83M
Stockholders Equity	213.04M	242.10M	277.69M	327.31M	382.13M	-11.31M
Cash Flow
Free Cash Flow	-50.78M	-43.45M	-58.82M	-52.23M	-30.91M	-8.74M
Operating Cash Flow	-50.64M	-43.10M	-58.56M	-51.32M	-29.38M	-8.67M
Investing Cash Flow	23.99M	43.95M	52.54M	-220.99M	-53.64M	-33.56M
Financing Cash Flow	648.00K	513.00K	724.00K	235.00K	379.21M	44.53M

Design Therapeutics Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 5.16
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

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 5.16 is above the 20-day moving average (MA) of 4.33, above the 50-day MA of 4.05, and above the 200-day MA of 4.63, indicating a bullish trend. The MACD of 0.32 indicates Negative momentum. The RSI at 68.44 is Neutral, neither overbought nor oversold. The STOCH value of 88.74 is Negative, 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
Sector *	60 Neutral	HK$18.32B	5.55	-4.00%	3.32%	9.92%	-18.97%
FDMT	52 Neutral	$331.59M	―	-38.87%	―	―	―
FHTX	47 Neutral	$290.85M	―	322.49%	―	-31.30%	36.26%
DSGN	47 Neutral	$293.85M	―	-26.77%	―	―	-24.60%
TERN	45 Neutral	$592.45M	―	-35.02%	―	―	20.37%
ANNX	38 Underperform	$261.12M	―	-66.75%	―	―	19.76%
NGNE	34 Underperform	$288.29M	―	-39.41%	―	-100.00%	-24.84%

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.