Avidity Biosciences (RNA) AI Stock Analysis

• Market Cap: $10.91B
• Dividend Yield: N/A
• Average Volume (3M): 2.73M
• Price to Earnings (P/E): ―
• Beta (1Y): 1.45
• Revenue Growth: 106.27%
• EPS Growth: -43.90%
• Country: US
• Employees: 391
• Sector: Healthcare
• Sector Strength: 45
• Industry: Biotechnology
• EPS (TTM): -1.27
• Shares Outstanding: 150,749,570
• 10 Day Avg. Volume: 2,829,159
• 30 Day Avg. Volume: 2,732,095
• PEG Ratio: 14.65
• Price to Book (P/B): 2.28
• Price to Sales (P/S): 297.77
• P/FCF Ratio: -10.54
• Enterprise Value/Market Cap: 0.38
• Enterprise Value/Revenue: 200.41
• Enterprise Value/Gross Profit: -35.67
• Enterprise Value/Ebitda: -7.03
• 1Y Price Target: $73.69
• Price Target Upside: 1.87% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 14
• EPS Forecast (FY): -4.41
• Revenue Forecast (FY): $18.37M

• Rating: 62 Neutral
• Price Target: $76.00 ▲(5.06% Upside)

The overall stock score reflects a mix of strong technical momentum and positive corporate events, particularly the merger with Novartis, which is a major strategic development. However, financial performance challenges, including negative profitability and cash flow, weigh on the score. The valuation reflects typical biotech growth characteristics, with a focus on future potential rather than current earnings.

Positive Factors

Merger with Novartis

The merger with Novartis is a strategic development that could enhance Avidity's market position and provide access to Novartis' resources, potentially accelerating product development and expanding market reach.

Revenue Growth

Strong revenue growth indicates successful product development and market acceptance, which can lead to increased financial stability and investment in future innovations.

Low Debt Levels

Maintaining low debt levels provides financial flexibility and reduces risk, allowing the company to invest in growth opportunities without the burden of high interest obligations.

Negative Factors

Profitability Challenges

Negative profit margins indicate high operational costs relative to revenue, which can hinder long-term sustainability unless addressed through cost management or increased sales.

Negative Cash Flow

Negative cash flow suggests the company is not generating sufficient cash from operations, which could limit its ability to fund new projects or weather financial downturns.

Delayed Regulatory Approval

Delays in regulatory approval can postpone revenue generation from new products, impacting financial projections and investor confidence in the company's growth timeline.

Avidity Biosciences Business Overview & Revenue Model

Company Description

Avidity Biosciences, Inc., a biopharmaceutical company, engages in the development of oligonucleotide-based therapies. It develops antibody oligonucleotide conjugates (AOC) that are designed to treat a range of serious diseases. The company's lead product candidate AOC 1001 is used for the treatment of myotonic dystrophy type 1, a rare monogenic muscle disease; AOC 1044 for the treatment of Duchenne Muscular Dystrophy; and AOC 1020 designed to treat facioscapulohumeral muscular dystrophy which are in preclinical stage. It also offers Lumizyme therapy for Pompe diseases. Avidity Biosciences, Inc. was incorporated in 2012 and is headquartered in San Diego, California.

How the Company Makes Money

Avidity Biosciences generates revenue through a combination of research and development collaborations, partnerships, and potential product sales. The company often enters into strategic collaborations with larger pharmaceutical companies, which may provide upfront payments, milestone payments upon the achievement of certain development stages, and royalties on future sales of any products that result from these partnerships. Additionally, Avidity may receive funding through government grants and public offerings, as well as through the commercialization of its proprietary therapies once they receive regulatory approval. The success of its revenue model is significantly influenced by the advancement of its product pipeline and the establishment of new partnerships within the biotechnology and pharmaceutical sectors.

Avidity Biosciences Financial Statement Overview

Summary

Avidity Biosciences demonstrates strong gross profit margins and revenue growth, but faces significant challenges with profitability and cash flow. The low debt levels provide some financial stability, yet the negative return on equity and operating cash flow highlight ongoing operational difficulties. The company needs to focus on improving profitability and cash flow to enhance its financial health.

Income Statement

Avidity Biosciences shows a strong gross profit margin of 92.41% in the TTM, indicating efficient cost management. However, the company is struggling with negative net profit margins and EBIT margins, reflecting significant operational losses. Revenue growth is positive at 20.19% in the TTM, suggesting some potential for future improvement.

Balance Sheet

The company maintains a low debt-to-equity ratio of 0.0043, indicating minimal leverage and financial risk. However, the return on equity is negative, reflecting ongoing losses and challenges in generating shareholder value. The equity ratio is strong, showing a solid capital structure.

Cash Flow

Avidity Biosciences has a negative operating cash flow, which is concerning for sustainability. The free cash flow growth rate is positive at 37.64% in the TTM, but the company still faces challenges in converting net income into cash flow, as indicated by the high free cash flow to net income ratio.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	20.87M	10.90M	9.56M	9.22M	9.33M	6.79M
Gross Profit	-117.26M	10.90M	7.46M	7.84M	-91.86M	-30.82M
EBITDA	-594.70M	-376.16M	-233.50M	-177.53M	-117.41M	-43.77M
Net Income	-549.79M	-322.30M	-212.22M	-174.00M	-118.01M	-44.35M
Balance Sheet
Total Assets	2.13B	1.56B	628.55M	638.80M	427.58M	333.90M
Cash, Cash Equivalents and Short-Term Investments	1.88B	1.50B	595.35M	610.73M	405.54M	328.14M
Total Debt	49.97M	6.80M	9.85M	10.69M	11.73M	938.00K
Total Liabilities	247.94M	138.94M	127.79M	60.73M	46.15M	27.68M
Stockholders Equity	1.89B	1.42B	500.76M	578.08M	381.43M	306.22M
Cash Flow
Free Cash Flow	-595.44M	-307.94M	-123.29M	-139.09M	-98.55M	-38.21M
Operating Cash Flow	-580.54M	-300.87M	-119.06M	-136.27M	-94.81M	-37.12M
Investing Cash Flow	-309.43M	-854.20M	-130.07M	-189.96M	-82.52M	-7.79M
Financing Cash Flow	869.80M	1.19B	93.86M	346.17M	176.32M	272.04M

Avidity Biosciences Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 72.34
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For RNA, the sentiment is Positive. The current price of 72.34 is above the 20-day moving average (MA) of 71.67, above the 50-day MA of 66.50, and above the 200-day MA of 43.20, indicating a bullish trend. The MACD of 1.42 indicates Positive momentum. The RSI at 74.74 is Negative, neither overbought nor oversold. The STOCH value of 80.96 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for RNA.

Avidity Biosciences Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PTCT	72 Outperform	$6.31B	9.22	―	―	97.54%	―
RNA	62 Neutral	$10.91B	-17.31	-32.44%	―	106.27%	-43.90%
RYTM	59 Neutral	$7.48B	-36.38	-240.36%	―	54.92%	28.47%
MRUS	52 Neutral	$7.36B	-18.17	-51.57%	―	57.54%	-36.57%
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%
IMVT	45 Neutral	$5.38B	-9.73	-95.93%	―	―	-27.70%
CRSP	40 Underperform	$5.32B	-10.38	-25.33%	―	-81.10%	-99.21%

Avidity Biosciences Corporate Events

Avidity Biosciences Receives FTC Clearance for Novartis Merger

On October 25, 2025, Avidity Biosciences entered into a merger agreement under which a Novartis wholly owned subsidiary will merge with Avidity, leaving Avidity as an indirect wholly owned subsidiary of Novartis, and on December 14, 2025 the board approved steps to manage tax and compensation consequences tied to that deal. To mitigate potential “excess parachute payment” consequences under Sections 280G and 4999 of the U.S. tax code and preserve corporate tax deductions, the board accelerated into December 2025 the vesting and payment of certain 2025 bonuses and performance stock units that would otherwise have been paid on closing of the merger or in 2026 for selected executives, including specified cash bonuses and large tranches of performance stock units for four named officers, with no duplication of compensation and subject to tax withholding. Each affected executive entered into a clawback agreement requiring repayment of the accelerated amounts if they are terminated for cause or resign without good reason before the date those payments would originally have been made (or, for accelerated PSUs, before December 31, 2029). Separately, following Hart-Scott-Rodino filings on November 21, 2025, the Federal Trade Commission on December 17, 2025 granted early termination of the HSR waiting period for the merger and related spin-off transactions, clearing a key antitrust condition, though completion of the deal still depends on the separation of Atrium Therapeutics (SpinCo) and other customary closing conditions.

Avidity Biosciences Announces Merger with Novartis AG

On October 25, 2025, Avidity Biosciences announced a merger agreement with Novartis AG, under which Novartis will acquire Avidity for $72.00 per share, valuing the company at approximately $12 billion. The merger includes the separation of Avidity’s early-stage precision cardiology programs into a new entity, SpinCo, which will be led by Kathleen Gallagher. The acquisition will provide Novartis with access to Avidity’s RNA-targeting delivery platform and its late-stage clinical programs. The transaction, expected to close in the first half of 2026, requires regulatory and stockholder approvals and is anticipated to enhance Novartis’ neuroscience pipeline.

Avidity Biosciences Delays Biologics License Application

On October 13, 2025, Avidity Biosciences announced a delay in the submission of its Biologics License Application for del-zota to the first quarter of 2026, following a pre-BLA meeting with the FDA. This delay is intended to provide additional non-clinical data to support the chemistry, manufacturing, and controls package, impacting the company’s timeline for regulatory approval.