HUTCHMED (HCM) AI Stock Analysis

• Market Cap: $2.50B
• Dividend Yield: N/A
• Average Volume (3M): 48.41K
• Price to Earnings (P/E): 5.0
• Beta (1Y): 0.39
• Revenue Growth: -1.35%
• EPS Growth: N/A
• Country: US
• Employees: 1,811
• Sector: Healthcare
• Sector Strength: 45
• Industry: Drug Manufacturers - Specialty & Generic
• EPS (TTM): 0.01
• Shares Outstanding: 174,465,530
• 10 Day Avg. Volume: 34,563
• 30 Day Avg. Volume: 48,412
• PEG Ratio: <0.01
• Price to Book (P/B): 1.85
• Price to Sales (P/S): 4.16
• P/FCF Ratio: -28.96
• Enterprise Value/Market Cap: 1.00
• Enterprise Value/Revenue: 4.13
• Enterprise Value/Gross Profit: 46.22
• Enterprise Value/Ebitda: -331.79
• 1Y Price Target: $20.00
• Price Target Upside: 42.05% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1
• EPS Forecast (FY): 0.31
• Revenue Forecast (FY): $638.55M

• Rating: 53 Neutral
• Price Target: $14.00 ▼(-0.57% Downside)
• Action: Reiterated Date: 03/07/26
• Date: Action: Reiterated 03/07/26

The score is held back primarily by weakening operating performance and cash burn despite a strong, low-leverage balance sheet. Technicals also indicate a sustained downtrend. A low P/E provides some valuation support, but is tempered by concerns that recent earnings are less repeatable and not backed by cash flow.

Positive Factors

Low leverage balance sheet

Hutchmed's very low debt-to-equity (~0.08) provides durable financial flexibility to support multi-year R&D and late-stage trials. Low leverage reduces interest costs and refinancing risk, enabling the company to fund development or strategic collaborations without near-term balance-sheet strain.

Late-stage clinical validation & approval

Publication of the SACHI Phase III in The Lancet and the June 2025 China approval of the savolitinib+osimertinib combination materially de-risks that program. Clinical validation and regulatory approval support sustainable commercialization, strengthen partner ties (AstraZeneca) and enhance the firm's long-term franchise value.

Reimbursement and commercial access in China

Renewal of the NHSA contract and continued inclusion of key drugs on China's National Reimbursement Drug List secures payer coverage. Durable reimbursement improves market access, supports steady demand and revenue predictability in China—a critical commercial market for sustaining product sales and reinvestment.

Negative Factors

Negative cash generation

Material negative operating and free cash flow in 2025 indicates the business is consuming cash rather than generating it. Persistent cash burn increases reliance on external financing or partner milestones, raising execution risk for multi-year trials and potentially forcing trade-offs between R&D, commercialization and capital preservation.

Weakening revenue & operating profitability

A year-over-year revenue decline alongside the shift to negative EBITDA/EBIT signals deteriorating core operations and margin pressure. This undermines the company's ability to self-fund growth, reduces reinvestment capacity into late-stage programs, and suggests the commercial model faces durability challenges absent operational fixes.

Earnings quality concerns

Exceptional net income in 2025 that contrasts with operating losses implies reliance on non-recurring or non-operating items. That reduces earnings predictability and investor confidence, and means reported profits may not translate into sustainable cash flows to underwrite R&D or commercialization over the coming quarters.

HUTCHMED Business Overview & Revenue Model

Company Description

HUTCHMED (China) Limited discovers, develops, and commercializes targeted therapeutics and immunotherapies for cancer and immunological diseases in HongKong and internationally. It operates in Oncology/Immunology and Other Ventures segments. The company develops Savolitinib, an inhibitor for non-small cell lung cancer (NSCLC), papillary and renal cell carcinoma, colorectal cancer (CRC), and gastric cancer (GC); and Fruquintinib, an inhibitor for CRC, breast cancer, GC, endometrial cancer (EMC), NSCLC, hepatocellular carcinoma, and gastrointestinal and solid tumors. It also develops Surufatinib, an inhibitor for neuroendocrine tumors (NET), pancreatic NET, non-pancreatic NET, biliary tract cancer, sarcoma, neuroendocrine neoplasm, esophageal cancer, small cell lung cancer, GC, thyroid cancer, EMC, NSCLC, and solid tumors; HMPL-523, a spleen tyrosine kinase inhibitor for hematological cancers and certain chronic immune diseases; and HMPL-689 for isoform PI3Kd (phosphoinositide 3'-kinase delta). In addition, it develops Tazemetostat, an inhibitor of EZH2 for the treatment of certain epithelioid sarcoma and follicular lymphoma patients; HMPL-306, an inhibitor for hematological malignancies, gliomas, and solid tumors; HMPL-760, an Bruton's tyrosine kinase inhibitor; HMPL-453, an inhibitor for intrahepatic cholangiocarcinoma; HMPL-295 for solid tumors; HMPL-653 for metastatic solid tumors and tenosynovial giant cell tumors; and Epitinib (HMPL-813) and Theliatinib (HMPL-309) inhibitors. It has collaboration agreements with AstraZeneca AB (publ), Lilly (Shanghai) Management Company Limited, BeiGene, Inmagene Biopharmaceuticals Co. Ltd., Innovent Biologics Co., Inc., Genor Biopharma Co. Ltd., Shanghai Junshi Biosciences Co. Ltd., and Epizyme, Inc. The company was formerly known as Hutchison China MediTech Limited and changed its name to HUTCHMED (China) Limited in May 2021. The company was incorporated in 2000 and is headquartered in Central, Hong Kong.

How the Company Makes Money

HUTCHMED generates revenue primarily through the commercialization of its proprietary drug products, including sales from its marketed therapies. Additionally, the company earns income through collaborations and partnerships with other pharmaceutical companies, which may include upfront payments, milestone payments, and royalties on product sales. HUTCHMED has established strategic alliances that enhance its research capabilities and expand its market reach, contributing significantly to its financial performance. The company's revenue model is also bolstered by its ability to attract investments for its clinical trials and the potential for future product approvals in various international markets.

HUTCHMED Financial Statement Overview

Summary

Balance sheet strength (low leverage; balance sheet score 74) is outweighed by weakening fundamentals: revenue declined in 2025, operating profitability turned negative, and cash flow quality is poor with negative operating and free cash flow (cash flow score 42). Reported net income appears heavily influenced by non-operating items, reducing earnings quality.

Income Statement

Revenue declined in 2025 (down 8.7% vs. 2024) after stronger levels in prior years, showing a choppy growth trajectory. Profitability is mixed: gross margin remains reasonable (38.7% in 2025) but operating profitability deteriorated, with EBITDA and EBIT turning negative in 2025 after being positive in 2023–2024. Net income in 2025 is exceptionally high (83.3% margin) despite operating losses, which suggests earnings were heavily influenced by non-operating items and may be less repeatable.

Balance Sheet

Leverage appears conservative, with debt-to-equity at ~0.08 in 2025 (and similarly low in prior years), providing financial flexibility. Equity and assets are sizable, and the company does not look balance-sheet constrained by debt. The main weakness is performance volatility (including periods of negative returns on equity historically), which can pressure equity quality over time even if headline leverage is low.

Cash Flow

Cash generation weakened materially in 2025 with operating cash flow of -$64.8M and free cash flow of -$79.0M, a sharp reversal from strong positive cash flow in 2023. While free cash flow improved versus the prior year (positive growth off a weak base), the business is currently consuming cash, and cash flow does not support the elevated 2025 net income level. Overall cash flow quality and consistency are the key concern.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	602.20M	549.96M	630.20M	838.00M	426.41M	356.13M
Gross Profit	53.76M	212.72M	281.32M	453.55M	115.31M	97.89M
EBITDA	-7.49M	-41.38M	14.11M	67.27M	-401.11M	-207.96M
Net Income	466.88M	458.12M	37.73M	100.78M	-360.83M	-194.65M
Balance Sheet
Total Assets	1.78B	1.75B	1.27B	1.28B	1.03B	1.37B
Cash, Cash Equivalents and Short-Term Investments	1.36B	1.37B	836.11M	886.34M	631.00M	1.01B
Total Debt	93.44M	97.89M	89.82M	86.13M	27.01M	38.98M
Total Liabilities	534.02M	501.84M	502.34M	536.39M	392.57M	333.15M
Stockholders Equity	1.23B	1.24B	759.93M	730.54M	610.37M	986.89M
Cash Flow
Free Cash Flow	-49.66M	-79.01M	-17.44M	186.65M	-305.26M	-220.98M
Operating Cash Flow	-32.56M	-64.83M	497.00K	219.26M	-268.60M	-204.22M
Investing Cash Flow	-73.03M	-29.49M	-96.06M	-291.14M	296.59M	-306.32M
Financing Cash Flow	11.22M	7.86M	-30.67M	48.66M	-82.76M	650.03M

HUTCHMED Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 14.08
• 50DMA: Negative
• 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 HCM, the sentiment is Negative. The current price of 14.08 is below the 20-day moving average (MA) of 14.33, below the 50-day MA of 14.75, and below the 200-day MA of 15.33, indicating a bearish trend. The MACD of -0.17 indicates Negative momentum. The RSI at 45.38 is Neutral, neither overbought nor oversold. The STOCH value of 49.42 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for HCM.

HUTCHMED Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ANIP	67 Neutral	$1.66B	14.40	15.55%	―	48.87%	―
SUPN	60 Neutral	$2.84B	-72.78	-0.01%	―	4.54%	-130.59%
AMRX	54 Neutral	$3.90B	54.80	-67.91%	―	9.50%	―
HCM	53 Neutral	$2.50B	4.99	47.54%	―	-1.35%	―
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%
PRGO	50 Neutral	$1.37B	-1.35	-35.16%	8.48%	-2.55%	66.00%
ALVO	42 Neutral	$1.26B	-117.81	-26.11%	―	55.38%	―