Nuvalent (NUVL) AI Stock Analysis

• Market Cap: $4.71B
• Dividend Yield: N/A
• Average Volume (3M): 578.87K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.55
• Revenue Growth: N/A
• EPS Growth: -81.09%
• Country: US
• Employees: 142
• Sector: Healthcare
• Sector Strength: 77
• Industry: Biotechnology
• EPS (TTM): -3.91
• Shares Outstanding: 66,162,670
• 10 Day Avg. Volume: 566,329
• 30 Day Avg. Volume: 578,865
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• Price to Cash Flow (P/CF): -22.50
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $111.13
• Price Target Upside: 69.04% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 9

Nuvalent's financial performance is typical for an early-stage biotech firm, characterized by high R&D expenses and no revenue. The strong cash reserves and lack of debt are positives, but ongoing losses and reliance on external financing present risks. Technical analysis indicates a bearish trend, with the stock exhibiting downward momentum. Valuation challenges persist due to the negative P/E ratio and lack of dividend yield. While the corporate event of appointing a new director is positive, it does not significantly impact the score due to its weight redistribution into other areas.

Positive Factors

Financial Performance

The company reported cash and cash equivalents of $1.1bn, which they estimate will provide a cash runway into 2028.

Market Opportunity

Annual US crizotinib sales in 2021-2023 stabilized at ~$100M - 105M, which may imply just under ~$1Bn in US annual opportunity for zidesaminib.

Regulatory Approval

Nuvalent is on track to achieve potential FDA regulatory approval of the ROS1-targeting tyrosine kinase inhibitor (TKI) zidesamtinib in 2026.

Negative Factors

Clinical Safety

Safety looked not as clean as that of zidesaminib, with 6.5% discontinuations, 29% dose reductions, neurologic AEs, and liver/GI signals including 1% treatment-related deaths across TRUST-I and TRUST-II.

Data Evaluation

Pretreated ROS1+ NSCLC patients are no longer being enrolled onto ARROS-1, which might limit the evaluation of new data.

Nuvalent Business Overview & Revenue Model

Company Description

Nuvalent, Inc., a clinical stage biopharmaceutical company, develops therapies for patients with cancer. Its lead product candidates are NVL-520, a brain-penetrant ROS1-selective inhibitor to inhibit ROS1 fusions that express the normal ROS1 kinase domain without any drug-resistant mutations and remain active in the presence of mutations conferring resistance to approved and investigational ROS1 inhibitors, which is under Phase I development; and NVL-655, a brain-penetrant ALK-selective inhibitor, to address the clinical challenges of emergent treatment resistance, central nervous system-related adverse events, and brain metastases that might limit the use of first-, second-, and third-generation ALK inhibitors that is under Phase I/II clinical trial. The company was incorporated in 2017 and is headquartered in Cambridge, Massachusetts.

How the Company Makes Money

Nuvalent makes money through the development and commercialization of its proprietary drug candidates. The company's revenue model primarily involves bringing its pipeline of targeted cancer therapies through clinical trials and regulatory approval to eventually enter the market. Once approved, these therapies can generate income through sales, licensing agreements, and potential partnerships with larger pharmaceutical companies. Additionally, Nuvalent may engage in collaborations that provide milestone payments and royalties, contributing to its earnings.

Nuvalent Financial Statement Overview

Summary

Nuvalent's financial statements reflect a typical early-stage biotechnology company with no revenue and high R&D expenses. The strong cash reserves and lack of debt are positives, but the ongoing losses and reliance on external financing highlight the risks associated with pre-revenue biotech firms. The company's financial health is contingent on its ability to continue attracting investment or achieving scientific breakthroughs that lead to revenue generation.

Income Statement

Nuvalent's income statement reflects a company in the early stages of development with no revenue generation, which is typical for biotechnology firms focused on R&D. The negative EBIT and net income margins highlight ongoing operational and research expenses. The continuous increase in net losses indicates significant investment in research without offsetting revenue.

Balance Sheet

The balance sheet shows a strong cash position with no debt, which provides financial flexibility. However, the absence of revenue and increasing losses raise concerns about long-term sustainability without future capital raises. The company has maintained positive stockholders' equity, which is a positive sign amidst increasing liabilities.

Cash Flow

Nuvalent's cash flow statements reveal negative operating cash flow, consistent with its development stage. The free cash flow is negative, indicating that the company is not yet generating cash from operations. The company relies heavily on financing activities to support its cash flow needs, which presents a potential risk if financing conditions change.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
0.00	0.00	0.00	0.00	0.00
	Gross Profit
0.00	0.00	0.00	0.00	0.00
	EBIT
-280.37M	-149.49M	-86.11M	-45.82M	-16.91M
	EBITDA
-280.37M	-126.22M	-86.11M	-45.82M	2.35M
	Net Income Common Stockholders
-260.76M	-126.22M	-73.35M	-46.34M	-14.56M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
1.12B	719.90M	472.16M	288.11M	10.33M
	Total Assets
1.14B	732.38M	482.46M	293.82M	10.65M
	Total Debt
0.00	0.00	0.00	0.00	2.23M
	Net Debt
-145.69M	-335.39M	-241.81M	-68.53M	-8.10M
	Total Liabilities
71.96M	31.82M	19.48M	8.79M	41.97M
	Stockholders Equity
1.07B	700.56M	462.98M	285.04M	-31.32M
Cash Flow		Free Cash Flow
-185.06M	-99.74M	-64.97M	-40.00M	-14.95M
	Operating Cash Flow
-185.06M	-99.74M	-64.97M	-40.00M	-14.95M
	Investing Cash Flow
-573.51M	-143.53M	-10.66M	-220.03M	0.00
	Financing Cash Flow
568.88M	336.85M	248.92M	318.22M	22.27M

Nuvalent Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 65.74
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NUVL, the sentiment is Negative. The current price of 65.74 is below the 20-day moving average (MA) of 73.23, below the 50-day MA of 77.46, and below the 200-day MA of 84.39, indicating a bearish trend. The MACD of -1.53 indicates Positive momentum. The RSI at 31.43 is Neutral, neither overbought nor oversold. The STOCH value of 16.68 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for NUVL.

Nuvalent Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
KRYS	77 Outperform	$4.93B	57.33	10.34%	―	473.02%	1620.44%
VRNA	56 Neutral	$4.56B	―	-76.51%	―	―	-213.94%
BPMC	52 Neutral	$5.22B	―	-31.26%	―	104.04%	87.80%
RVMD	51 Neutral	$5.82B	―	-29.33%	―	-100.00%	5.49%
AXSM	51 Neutral	$4.82B	―	-231.63%	―	42.53%	-15.29%
Sector *	48 Neutral	$6.36B	1.14	-49.00%	2.63%	17.14%	1.39%
NUVL	34 Underperform	$4.71B	―	-29.46%	―	―	-81.09%

Nuvalent Corporate Events

Nuvalent Elects Grant Bogle as Independent Director

Nuvalent, Inc. has elected Grant Bogle as a new independent director, marking a strategic addition to its Board. Bogle’s compensation includes stock options and restricted stock units, enticing potential investors with a vested interest in the company’s success. Additionally, Nuvalent unveiled a new performance-based restricted stock unit agreement, reflecting a commitment to aligning executive incentives with company performance, a move that could impact investor confidence and stock performance.