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Fractyl Health, Inc. (GUTS)
NASDAQ:GUTS
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Fractyl Health, Inc. (GUTS) AI Stock Analysis

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GUTS

Fractyl Health, Inc.

(NASDAQ:GUTS)

Rating:42Neutral
Price Target:
$1.00
▲(3.09% Upside)
Fractyl Health's overall stock score is primarily impacted by its weak financial performance, characterized by high leverage and negative cash flows. While recent corporate events and earnings call insights provide some optimism, the company's financial instability and bearish technical indicators weigh heavily on the score.
Positive Factors
Clinical Efficacy
The Germany Real-World Registry study showed a median 9.6% weight loss and 1.6% HbA1c reduction after a single Revita procedure, with no serious adverse events.
Clinical Trial Results
3-month data from the open-label cohort of the pivotal trial surprised to the upside and suggests a likely positive outcome.
Financial Position
A recent offering completed in August raised approximately $23M, with additional potential proceeds from warrants, extending cash runway into 2026.
Negative Factors
Gene Therapy Risks
Concerns exist regarding the potential risks and complexities associated with GLP-1 gene therapy, including the need for advanced procedural training and the dangers of pancreatic injections.
Skepticism and Uncertainty
There is skepticism over the unclear mechanism of duodenal resurfacing, though some believe it works based on existing data.
Stock Price Target
The price target was decreased to $6 from a previous $12, following the updates in the model for 2Q25 results.

Fractyl Health, Inc. (GUTS) vs. SPDR S&P 500 ETF (SPY)

Fractyl Health, Inc. Business Overview & Revenue Model

Company DescriptionFractyl Health, Inc., a metabolic therapeutics company, develops therapies for the treatment of type 2 diabetes (T2D) and obesity. The company develops Revita DMR System (Revita), an outpatient procedural therapy designed to durably modify duodenal dysfunction, a pathologic consequence of a high fat and high sugar diet, which can initiate T2D and obesity in humans. It also develops Rejuva, a novel virus delivered pancreatic gene therapy platform that is designed to enable long-term remission of T2D and obesity by durably altering metabolic hormone function in the pancreatic islet cells of patients. Fractyl Health, Inc. was formerly known as Fractyl Laboratories Inc. and changed its name to Fractyl Health, Inc. on June 09, 2021. The company was incorporated in 2010 and is based in Lexington, Massachusetts.
How the Company Makes MoneyFractyl Health, Inc. generates revenue primarily through the development and commercialization of its proprietary procedural therapies targeting metabolic diseases. The company relies on collaborations with healthcare providers, medical institutions, and potential licensing agreements to drive adoption of its innovative treatments. Revenue is also generated from clinical trials and research partnerships, which help validate and promote the efficacy of its therapies. As the company advances its products through regulatory approvals and expands its market reach, additional revenue streams may include partnerships with pharmaceutical companies and healthcare payers, as well as direct sales to medical facilities.

Fractyl Health, Inc. Earnings Call Summary

Earnings Call Date:Aug 12, 2025
(Q2-2025)
|
% Change Since: |
Next Earnings Date:Nov 18, 2025
Earnings Call Sentiment Positive
Fractyl Health's earnings call highlighted several positive developments, including a strengthened financial position, strategic focus on reducing cash burn, and promising data from the Revita program. However, the company also reported an increased net loss and highlighted dependence on future data readouts for continued success. The overall sentiment is cautiously optimistic, with significant potential contingent on upcoming results.
Q2-2025 Updates
Positive Updates
Strengthened Financial Position
Fractyl Health completed a $23 million underwritten public offering of common stock, led by several leading healthcare investors, which extends the company’s cash runway through key upcoming data readouts.
Reduced Cash Burn
The company reduced its cash burn rate from $25.4 million in Q1 to $19.8 million in Q2 by winding down spend on noncritical programs.
Positive Data from Revita
New data from the German real-world registry study showed up to two years of benefit in weight maintenance and blood sugar control following a single Revita treatment.
Revita's Market Potential
Revita could be positioned as a straightforward, one-time intervention for obesity, akin to LASIK, with substantial interest from GI physicians and potential for significant procedure volumes upon FDA approval.
Rejuva Program Advancements
Rejuva has completed preclinical efficacy, toxicity, and biodistribution studies, with CMC manufacturing nearly complete and agreement reached with regulators on the design of the forthcoming clinical study.
Negative Updates
Increased Net Loss
Fractyl reported a net loss of $27.9 million for the quarter, compared to $17.2 million in Q2 2024, largely due to changes in noncash fair value of notes and warrants, and increased operating expenses.
Dependence on Future Data Readouts
The success of Fractyl's programs is heavily dependent on upcoming data readouts, such as the 3-month randomized data from the REMAIN-1 midpoint cohort and subsequent trials.
Company Guidance
During Fractyl Health's second-quarter 2025 earnings call, the company provided guidance on several key metrics and strategic initiatives. They reported a reduction in their cash burn rate from $25.4 million in Q1 to $19.8 million in Q2, following a strategic reprioritization. A $23 million public offering has positioned them to extend their cash runway through upcoming REMAIN-1 study milestones. Fractyl highlighted progress in their Revita program, reporting that recent data from a German study showed up to two years of weight maintenance benefits. Additionally, they expect to report 3-month randomized data from their REMAIN-1 midpoint cohort next month, which will be crucial for assessing Revita's efficacy in maintaining weight loss post-GLP-1 discontinuation. On the financial front, R&D expenses rose to $21.2 million from $16.8 million in the prior year, while their net loss increased to $27.9 million. The company expects its current cash position to support operations into 2026, aligning with key data readouts and a potential FDA application for Revita.

Fractyl Health, Inc. Financial Statement Overview

Summary
Fractyl Health faces significant financial challenges characterized by persistent operating losses, high leverage, and negative equity. The company has been unable to generate substantial revenue or profits, relying heavily on external financing to cover its cash needs. While the cash position has improved, the overall financial situation remains precarious, with substantial risks due to high debt levels and negative cash flows.
Income Statement
15
Very Negative
Fractyl Health has shown a pattern of operating losses over the years, with a significant negative EBIT and net income. The gross profit margin is not applicable due to minimal revenue in the latest period. Revenue growth is negative, with a substantial decline in total revenue from previous periods. This indicates challenges in generating sales and controlling operational costs.
Balance Sheet
30
Negative
The company has a high level of debt relative to its equity, indicating high leverage and potential financial risk. The negative stockholders' equity and high debt-to-equity ratio signal financial instability. However, cash reserves have improved in the latest period, which could provide some liquidity cushion despite overall negative equity.
Cash Flow
20
Very Negative
Fractyl Health is experiencing negative operating and free cash flows, reflecting operational challenges and a reliance on external financing for cash needs. Although operating cash flow has improved compared to the previous year, the free cash flow remains negative, indicating the business is not self-sustaining through its operations alone.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue17.00K93.00K120.00K0.000.000.00
Gross Profit-550.00K43.00K43.00K-452.00K-676.00K-770.00K
EBITDA-100.66M-92.85M-50.55M-48.93M-36.25M-28.19M
Net Income-99.77M-68.69M-77.09M-46.45M-38.73M-30.48M
Balance Sheet
Total Assets62.01M108.08M76.21M60.96M102.55M34.76M
Cash, Cash Equivalents and Short-Term Investments22.29M67.46M33.21M49.27M95.47M29.11M
Total Debt61.72M62.50M86.39M306.81M304.34M202.78M
Total Liabilities80.22M79.65M401.27M313.27M311.87M207.48M
Stockholders Equity-18.21M28.42M-325.06M-252.32M-209.32M-172.72M
Cash Flow
Free Cash Flow-82.34M-67.29M-43.18M-46.30M-33.51M-31.07M
Operating Cash Flow-81.35M-65.52M-42.82M-46.24M-33.46M-31.07M
Investing Cash Flow-992.00K-1.76M-359.00K-56.00K-51.00K-2.00K
Financing Cash Flow1.88M101.23M27.44M4.35M99.88M54.39M

Fractyl Health, Inc. Technical Analysis

Technical Analysis Sentiment
Negative
Last Price0.97
Price Trends
50DMA
1.44
Negative
100DMA
1.56
Negative
200DMA
1.66
Negative
Market Momentum
MACD
-0.15
Negative
RSI
31.32
Neutral
STOCH
27.99
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GUTS, the sentiment is Negative. The current price of 0.97 is below the 20-day moving average (MA) of 1.04, below the 50-day MA of 1.44, and below the 200-day MA of 1.66, indicating a bearish trend. The MACD of -0.15 indicates Negative momentum. The RSI at 31.32 is Neutral, neither overbought nor oversold. The STOCH value of 27.99 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for GUTS.

Fractyl Health, Inc. Risk Analysis

Fractyl Health, Inc. disclosed 92 risk factors in its most recent earnings report. Fractyl Health, Inc. 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

Fractyl Health, Inc. Peers Comparison

Overall Rating
UnderperformOutperform
Sector (55)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
58
Neutral
$336.42M3.57108.21%18.01%306.76%
55
Neutral
$6.43B-2.52-4.30%5.96%15.30%11.62%
54
Neutral
$57.89M33.976.61%21.75%
50
Neutral
$57.83M-156.16%25.26%
45
Neutral
$59.96M-195.55%-0.11%43.47%
42
Neutral
$70.11M-379.75%-85.71%66.38%
40
Underperform
$74.19M-45.57%-61.41%
* General Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
GUTS
Fractyl Health, Inc.
0.97
-2.41
-71.30%
ICCC
Immucell
6.40
2.59
67.98%
PDSB
PDS Biotechnology
1.24
-1.77
-58.80%
CTMX
CytomX Therapeutics
2.04
0.79
63.20%
CUE
Cue Biopharma
0.78
0.12
18.18%
PMVP
PMV Pharmaceuticals
1.40
-0.11
-7.28%

Fractyl Health, Inc. Corporate Events

Private Placements and Financing
Fractyl Health Raises $20.7M Through Stock Offering
Neutral
Aug 7, 2025

On August 6, 2025, Fractyl Health, Inc. entered into an underwriting agreement with Ladenburg Thalmann & Co. Inc. for an offering of 19,047,619 shares of common stock and associated warrants, raising approximately $20.7 million in net proceeds. The company plans to use these funds to support its pipeline programs and general corporate purposes, with potential additional proceeds from warrant exercises. The offering closed on August 7, 2025, and includes conditions for warrant exercises and stockholder approvals, impacting the company’s financial strategy and stakeholder engagement.

Product-Related AnnouncementsBusiness Operations and Strategy
Fractyl Health Unveils Positive REMAIN-1 Study Results
Positive
Jun 23, 2025

On June 23, 2025, Fractyl Health, Inc. announced positive 3-month data from the REVEAL-1 cohort of its REMAIN-1 pivotal study, indicating that its Revita procedure may help maintain or further weight loss after GLP-1 therapy discontinuation. The study showed that 12 of 13 participants maintained or lost weight, with no serious adverse effects reported. Additionally, Fractyl presented promising preclinical data on its Rejuva Smart GLP-1 pancreatic gene therapy platform, which prevented obesity and hyperglycemia in animal models. These findings support further development of Fractyl’s metabolic disease therapies, with upcoming data readouts expected to reinforce Revita’s potential in post-GLP-1 weight maintenance.

Product-Related AnnouncementsBusiness Operations and Strategy
Fractyl Health Announces New Patents for Gut Therapies
Positive
Jun 18, 2025

On June 18, 2025, Fractyl Health, Inc. announced the issuance of two new U.S. patents that enhance its intellectual property portfolio, which protects its duodenal resurfacing innovations. These patents, issued on May 20 and June 17, 2025, are directed towards ablating duodenal mucosa using various forms of energy, reinforcing Fractyl’s leadership in metabolic disease treatment. The announcement underscores Fractyl’s commitment to advancing gut-targeted therapies for obesity and type 2 diabetes, with its lead product candidate, Revita, being a first-in-class treatment designed to remodel the duodenal lining. The company is also preparing for key data readouts from its ongoing pivotal study of Revita, which may demonstrate its potential in maintaining weight loss and supporting durable metabolic outcomes.

Executive/Board ChangesShareholder Meetings
Fractyl Health Holds Annual Stockholder Meeting
Neutral
Jun 12, 2025

On June 11, 2025, Fractyl Health, Inc. held its Annual Meeting of Stockholders, with approximately 70.38% of the company’s common stock voting power represented. During the meeting, William W. Bradley, Ajay Royan, and Amy W. Schulman were elected as Class I directors for a three-year term, and Ernst & Young LLP was ratified as the independent registered public accounting firm for the fiscal year ending December 31, 2025.

Product-Related AnnouncementsBusiness Operations and StrategyRegulatory Filings and Compliance
Fractyl Health Submits Clinical Trial Application in Europe
Positive
May 19, 2025

On May 19, 2025, Fractyl Health, Inc. announced the submission of the first module of its Clinical Trial Application in Europe for RJVA-001, a gene therapy candidate from its Rejuva platform. This marks a significant step in advancing their novel approach to treating type 2 diabetes and obesity by targeting pancreatic beta cells to enable physiologic hormone secretion. The upcoming Phase 1/2 study will assess the safety, tolerability, and preliminary efficacy of RJVA-001, potentially transforming diabetes treatment from daily management to a one-time therapy. If successful, this could significantly impact the company’s operations and industry positioning by offering a commercially viable path to durable disease remission.

Product-Related AnnouncementsBusiness Operations and Strategy
Fractyl Health Unveils Promising Gene Therapy Data
Positive
May 19, 2025

On May 17, 2025, Fractyl Health, Inc. announced new preclinical data from its Rejuva smart GLP-1 gene therapy platform at the ASGCT 2025 Annual Meeting. The data highlighted RJVA-001’s potential to deliver durable, nutrient-responsive GLP-1 secretion from pancreatic beta cells, mimicking natural hormone regulation with low systemic GLP-1 levels. This suggests a significant advantage over current GLP-1 drugs, and the therapy demonstrated strong efficacy, targeted delivery, and a favorable safety profile. The company plans to submit the first Clinical Trial Application for RJVA-001 by June 2025, advancing towards first-in-human studies.

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.Date of analysis: Aug 19, 2025