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Fate Therapeutics (FATE)
NASDAQ:FATE
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Fate Therapeutics
(NASDAQ:FATE)
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Rating:51Neutral
Price Target:
$1.00
▼(-15.97% Downside)
The score is held back primarily by weak financial performance—shrinking/volatile revenue, deep losses, and significant ongoing free-cash-flow burn—despite moderate leverage. Offsetting factors include constructive short-term technical momentum and a positive clinical-trial corporate update that improves pipeline optionality, while valuation is difficult to support given negative earnings and no dividend yield.
Positive Factors
Promising Clinical Trials
The promising Phase 1 trial results for FT819 suggest potential for outpatient treatment and same-day discharge, enhancing market position in autoimmune disease treatment.
Strategic Partnerships
Strategic partnerships provide substantial financial backing and resources, offering avenues for revenue generation through successful clinical trials and market entry.
New CFO Appointment
The appointment of a new CFO with extensive financial leadership experience is expected to advance the company’s financial strategy and support clinical programs.
Negative Factors
Negative Cash Flow
Persistent negative cash flow indicates operational cash flow deficits, highlighting the company's struggle to generate sufficient cash to cover expenditures without external financing.
Declining Revenue
A significant decline in revenue growth reflects challenges in maintaining sales momentum, impacting long-term financial sustainability and market competitiveness.
Persistent Losses
Consistent net losses and negative profit margins indicate difficulties in achieving profitability, which can hinder long-term growth and operational sustainability.
Fate Therapeutics (FATE) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$139.58M
Dividend YieldN/A
Average Volume (3M)1.59M
Price to Earnings (P/E)―
Beta (1Y)1.89
Revenue Growth-46.92%
EPS Growth20.26%
CountryUS
Employees181
SectorHealthcare
Sector Strength45
IndustryBiotechnology
Share Statistics
EPS (TTM)-0.27
Shares Outstanding115,352,290
10 Day Avg. Volume1,888,534
30 Day Avg. Volume1,591,680
Financial Highlights & Ratios
PEG Ratio0.00
Price to Book (P/B)0.59
Price to Sales (P/S)13.76
P/FCF Ratio-1.52
Enterprise Value/Market Cap1.26
Enterprise Value/Revenue24.65
Enterprise Value/Gross Profit24.65
Enterprise Value/Ebitda-1.26
Forecast
1Y Price Target
$4.90Price Target Upside311.76% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering7
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
Fate Therapeutics Business Overview & Revenue Model
Company DescriptionFate Therapeutics, Inc., a clinical-stage biopharmaceutical company, develops programmed cellular immunotherapies for cancer and immune disorders worldwide. Its NK- and T-cell immuno-oncology programs under development include FT516 for the treatment of acute myeloid leukemia (AML) B-cell lymphoma, and advanced solid tumor; FT596 to treat B-cell lymphoma and chronic lymphocytic leukemia; FT538 to treat AML and multiple myeloma; FT576 to treat multiple myeloma; FT819 to treat hematologic malignancies and solid tumors; FT536 to treat solid tumors; and FT500 for the treatment of advanced solid tumors. The company has a collaboration and option agreement with Ono Pharmaceutical Co. Ltd. for the development and commercialization of two off-the-shelf iPSC-derived CAR T-cell product candidates; strategic research collaboration and license agreement with Juno Therapeutics, Inc. to screen for and identify small molecule modulators that enhance the therapeutic properties of genetically-engineered T-cell immunotherapies; and a collaboration and option agreement with Janssen Biotech, Inc. Fate Therapeutics, Inc. was incorporated in 2007 and is headquartered in San Diego, California.
How the Company Makes MoneyFate Therapeutics generates revenue through a combination of product development collaborations, licensing agreements, and the advancement of its clinical programs. Significant revenue streams include milestone payments from partnerships with pharmaceutical companies, royalties on future sales of licensed products, and potential product sales once therapies receive regulatory approval. The company collaborates with leading organizations in the biopharmaceutical industry to develop and commercialize its therapies, which can provide substantial financial backing and resources while also offering avenues for revenue generation through successful clinical trials and market entry.
Fate Therapeutics Earnings Call Summary
Earnings Call Date:May 09, 2024
(Q1-2024)
| % Change Since: |
Next Earnings Date:Mar 02, 2026
Earnings Call Sentiment Neutral
The earnings call highlighted significant progress in clinical trials, particularly with FT819 and FT522, alongside a strong financial position. However, revenue growth remains limited and operating expenses are high, suggesting a balanced outlook with promising clinical achievements countered by financial challenges.Q1-2024 Updates
Positive Updates
FT819 and FT522 Data Presentation
Presented promising data from FT819 and FT522 programs at the ASGCT Annual Meeting, showing potential disease-modifying effects and immune reset in B-cell-mediated autoimmune diseases.
First Lupus Patient Treated
The first lupus patient was treated with FT819, showing no notable adverse events post-treatment.
Strong Financial Position and Fundraising
Raised $100 million through an underwritten offering and a private placement, ending the quarter with $391 million in cash, cash equivalents, and investments.
FT522 Safety Assessment
First 3 patients in FT522 study completed safety assessment without dose-limiting toxicities.
Negative Updates
Limited Revenue Growth
Reported revenue of $1.9 million, consistent with prior quarters, reflecting limited growth.
High Operating Expenses
Total operating expenses for the quarter increased by 7% relative to the fourth quarter of 2023 to $53 million.
Company Guidance
During the Fate Therapeutics Q1 2024 earnings call, the company provided guidance on its clinical and financial outlook. Key program initiatives were discussed, including the FT819 CAR T-cell and FT522 CAR NK cell programs, with notable translational data presented at the American Society of Gene and Cell Therapy Annual Meeting. The company highlighted its plans to achieve several clinical milestones across its iPSC product pipeline, targeting both cancer and autoimmune diseases. Financially, Fate Therapeutics raised $100 million through an underwritten offering and private placement, ending the first quarter with approximately $391 million in cash. Operating expenses for the full year are projected between $215 million and $230 million, with a year-end cash balance exceeding $270 million. The company's strategic focus is on demonstrating the disease-modifying potential of its therapies while maintaining a strong financial position to support ongoing and future clinical development.Fate Therapeutics Financial Statement Overview
Summary
Financials reflect a high-burn, loss-making biotech profile: revenue is modest and declining (TTM ~$7.1M, down ~15.7%), profitability is deeply negative (TTM EBIT about -$174.7M; net loss about -$156.1M), and cash burn remains heavy (TTM operating cash flow about -$110.6M; free cash flow about -$115.4M). The balance sheet leverage is moderate (debt ~$79.2M vs equity ~$234.1M), but equity/assets have trended down, raising funding risk if burn continues.Income Statement
TTM (Trailing-Twelve-Months) revenue is modest at ~$7.1M and down ~15.7% versus the prior period, extending a multi-year pattern of sharp revenue volatility. Profitability remains very weak with large operating losses (TTM EBIT of about -$174.7M and net loss of about -$156.1M), and margins are deeply negative, indicating the cost structure is far ahead of the current revenue base. A positive is that gross profit is positive in the most recent periods (TTM and 2024), but the overall earnings profile is still heavily loss-making with no clear inflection visible in the provided data.18
Very Negative
Balance Sheet
Leverage appears manageable for a development-stage biotech: total debt is ~$79.2M in TTM (down from ~$103.5M in 2023) against stockholders’ equity of ~$234.1M, resulting in moderate debt relative to equity. However, the balance sheet has weakened over time as equity and total assets have declined meaningfully from 2021–2022 levels, consistent with ongoing losses and cash usage. Returns to shareholders are materially negative (TTM return on equity around -56.6%), which is the key constraint despite the not-excessive debt load.52
Neutral
Cash Flow
Cash generation remains the major pressure point: TTM operating cash flow is about -$110.6M and free cash flow about -$115.4M, implying continued cash burn to fund operations. While free cash flow burn is slightly better than some prior years, it is still firmly negative and recently deteriorated (TTM free cash flow growth about -2.8%). A relative positive is that free cash flow broadly tracks net losses (free cash flow to net income around 1.04x in TTM), suggesting losses are not being masked by unusually large non-cash add-backs, but the absolute level of cash outflow remains high.24
Negative
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 7.14M | 13.63M | 63.53M | 96.30M | 55.85M | 31.43M |
| Gross Profit | 7.14M | 13.63M | -93.65M | 82.54M | 50.00M | -94.19M |
| EBITDA | -139.96M | -176.58M | -172.23M | -294.63M | -211.14M | -125.00M |
| Net Income | -156.09M | -186.26M | -160.93M | -281.72M | -212.15M | -173.39M |
Balance Sheet | ||||||
| Total Assets | 343.67M | 440.69M | 506.22M | 705.56M | 921.46M | 622.46M |
| Cash, Cash Equivalents and Short-Term Investments | 215.42M | 279.07M | 315.18M | 436.23M | 615.91M | 482.92M |
| Total Debt | 79.25M | 85.27M | 103.54M | 109.34M | 114.82M | 97.30M |
| Total Liabilities | 109.61M | 121.97M | 137.80M | 221.62M | 242.62M | 238.01M |
| Stockholders Equity | 234.07M | 318.73M | 368.42M | 483.94M | 678.84M | 384.44M |
Cash Flow | ||||||
| Free Cash Flow | -115.43M | -123.60M | -138.42M | -283.77M | -213.57M | -44.16M |
| Operating Cash Flow | -110.57M | -122.87M | -132.26M | -248.21M | -162.87M | -39.23M |
| Investing Cash Flow | 106.35M | 12.22M | 112.67M | 166.75M | -324.02M | -161.08M |
| Financing Cash Flow | 6.93M | 99.89M | 85.00K | 9.21M | 453.13M | 282.84M |
Fate Therapeutics Technical Analysis
Positive
1.19
Price Trends
1.08
Positive
1.15
Positive
1.16
Positive
Market Momentum
0.05
Negative
54.67
Neutral
70.73
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FATE, the sentiment is Positive. The current price of 1.19 is above the 20-day moving average (MA) of 1.12, above the 50-day MA of 1.08, and above the 200-day MA of 1.16, indicating a bullish trend. The MACD of 0.05 indicates Negative momentum. The RSI at 54.67 is Neutral, neither overbought nor oversold. The STOCH value of 70.73 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for FATE.
Fate Therapeutics Risk Analysis
Fate Therapeutics disclosed 87 risk factors in its most recent earnings report. Fate Therapeutics reported the most risks in the "Tech & Innovation" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Fate Therapeutics Peers Comparison
UnderperformOutperform
Sector (51)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
56 Neutral | $182.39M | ― | -52.95% | ― | -88.47% | -1658.33% | |
53 Neutral | $263.88M | -3.99 | -57.84% | ― | -84.46% | 33.32% | |
52 Neutral | $119.44M | -3.59 | -745.66% | ― | ― | ― | |
51 Neutral | $7.86B | -0.30 | -43.30% | 2.27% | 22.53% | -2.21% | |
51 Neutral | $139.58M | -0.90 | -52.35% | ― | -46.92% | 20.26% | |
47 Neutral | $175.44M | -1.75 | -26.69% | ― | ― | 25.84% | |
44 Neutral | $109.12M | -2.04 | -102.71% | ― | -27.29% | 16.40% |
* Healthcare Sector Average
FATE
Fate Therapeutics
1.19
-0.11
-8.46%
CGEN
Compugen
1.93
-0.40
-17.17%
ONCY
Oncolytics Biotech
1.01
0.28
38.55%
CRDF
Cardiff Oncology
1.62
-2.42
-59.93%
NKTX
Nkarta
2.43
0.09
3.85%
STTK
Shattuck Labs
4.07
2.91
250.86%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.