Sutro Biopharma (STRO) AI Stock Analysis

• Market Cap: $52.60M
• Dividend Yield: N/A
• Average Volume (3M): 1.96M
• Price to Earnings (P/E): ―
• Beta (1Y): 3.16
• Revenue Growth: -59.64%
• EPS Growth: -67.75%
• Country: US
• Employees: 310
• Sector: Healthcare
• Sector Strength: 74
• Industry: Biotechnology
• EPS (TTM): -3.01
• Shares Outstanding: 83,775,340
• 10 Day Avg. Volume: 1,477,591
• 30 Day Avg. Volume: 1,957,785
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 1.04
• Price to Cash Flow (P/CF): -0.20
• 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: $3.17
• Price Target Upside: 403.17% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 10

Sutro Biopharma's overall stock score reflects considerable financial challenges, including declining revenues and increased cash burn. Technical analysis shows strong bearish trends, further affecting the stock's appeal. While strategic changes aim to improve operational efficiency, these corporate events are seen negatively. The current valuation, highlighted by a negative P/E ratio, also detracts from the investment case.

Positive Factors

Financial Strength

Sutro Biopharma has a solid cash position of $316.9 million, which is seen as a financial strength.

Partnership Potential

Sutro Biopharma is considered an ideal partner for big pharmaceutical companies, based on its potential to expand the addressable population in certain cancer treatments.

Pipeline Development

Management is focusing on advancing their next-generation ADC pipeline, which has potential best-in-class prospects.

Negative Factors

Operational Restructuring

A reduction in workforce by approximately 50% and changes to the executive leadership team have been announced, reflecting operational restructuring.

Program Discontinuation

The company announced a deprioritization of the luvelta clinical program, which was a primary driver for the previous investment thesis.

Share Performance

Shares are down -35% YTD as investors view the lack of catalysts and limited positive differentiation for Luvelta as key headwinds.

Sutro Biopharma Business Overview & Revenue Model

Company Description

Sutro Biopharma, Inc. operates as clinical stage drug discovery, development, and manufacturing company. It focuses on creating protein therapeutics for cancer and autoimmune disorders through integrated cell-free protein synthesis and site-specific conjugation platform, XpressCF+.The company's product candidates include STRO-001, an antibody-drug conjugate (ADC) directed against the cancer target CD74 for patients with multiple myeloma and non-Hodgkin lymphoma that is in Phase 1 clinical trials; and STRO-002, an ADC directed against folate receptor-alpha for patients with ovarian and endometrial cancers, which is in Phase 1 clinical trials. It has collaboration and license agreements with Merck Collaboration to develop research programs focusing on cytokine derivatives for cancer and autoimmune disorders; and Celgene Corporation to discover and develop bispecific antibodies and/or ADCs focused on the field of immuno-oncology. The company was formerly known as Fundamental Applied Biology, Inc. Sutro Biopharma, Inc. was incorporated in 2003 and is headquartered in South San Francisco, California.

How the Company Makes Money

Sutro Biopharma generates revenue through a combination of collaborative research and development agreements, milestone payments, and potential royalties from its partnerships with major pharmaceutical companies. The company collaborates with leading global biotechnology and pharmaceutical firms to co-develop and commercialize its candidates, sharing in both the development costs and the financial returns upon successful commercialization. Key revenue streams include upfront payments received from partners upon entering into collaboration agreements, milestone payments tied to the achievement of specific development and regulatory goals, and potential future royalties on net sales of any successfully commercialized products. Sutro's innovative platform and strategic partnerships are crucial contributors to its revenue generation strategy.

Sutro Biopharma Financial Statement Overview

Summary

Sutro Biopharma faces significant financial challenges characterized by declining revenues, increased losses, and cash flow difficulties. While the company maintains a strong cash position, rising leverage and declining equity are concerning. The overall financial health requires strategic improvements in revenue generation and cost control to stabilize and grow.

Income Statement

Sutro Biopharma has experienced fluctuating revenues with a decline in total revenue from $153.7 million in 2023 to $62.0 million in 2024, showing a revenue growth rate of -59.65% in the latest period. Gross profit margin remains stable at 100%, but net profit margins have worsened due to increasing net losses. EBIT and EBITDA margins are negative, indicating operational challenges and a need for cost management improvements.

Balance Sheet

The company's balance sheet shows a concerning debt-to-equity ratio of 0.52 in 2024, up from 0.22 in 2023, indicating increased leverage. Stockholders’ equity has decreased significantly, impacting the equity ratio, which stands at 11.5%. Despite these concerns, the company maintains a strong cash position, which can provide some cushion against financial instability.

Cash Flow

Operating cash flow is negative, worsening from -$111.6 million in 2023 to -$191.5 million in 2024, highlighting increased cash burn. Free cash flow is also negative and has declined, reflecting substantial challenges in generating cash from operations. The operating cash flow to net income ratio underscores the company's struggle to convert earnings into cash.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
62.04M	153.73M	67.77M	61.88M	42.72M
	Gross Profit
62.04M	146.91M	59.48M	52.11M	-34.24M
	EBIT
-238.45M	-89.28M	-128.94M	-98.52M	-71.06M
	EBITDA
-186.81M	-67.92M	-105.07M	-98.52M	-23.75M
	Net Income Common Stockholders
-227.46M	-106.79M	-119.20M	-108.67M	-36.20M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
316.89M	375.62M	302.34M	197.94M	368.14M
	Total Assets
387.21M	470.74M	406.94M	341.41M	394.11M
	Total Debt
23.15M	33.63M	67.52M	57.37M	24.55M
	Net Debt
-167.15M	-35.63M	20.26M	26.96M	-181.61M
	Total Liabilities
342.61M	321.09M	189.90M	88.84M	62.06M
	Stockholders Equity
44.60M	149.65M	217.05M	252.56M	332.05M
Cash Flow		Free Cash Flow
-194.64M	-115.93M	-4.31M	-97.00M	-74.93M
	Operating Cash Flow
-191.54M	-111.62M	3.55M	-81.68M	-67.80M
	Investing Cash Flow
218.51M	-3.92M	-35.02M	-97.31M	604.00K
	Financing Cash Flow
94.05M	137.55M	48.31M	3.26M	269.25M

Sutro Biopharma Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 0.63
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Positive
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For STRO, the sentiment is Negative. The current price of 0.63 is below the 20-day moving average (MA) of 0.75, below the 50-day MA of 1.32, and below the 200-day MA of 2.80, indicating a bearish trend. The MACD of -0.25 indicates Positive momentum. The RSI at 20.99 is Positive, neither overbought nor oversold. The STOCH value of 6.12 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for STRO.

Sutro Biopharma Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
STRO	48 Neutral	$52.60M	―	-234.19%	―	-59.64%	-67.75%
Sector *	48 Neutral	$6.36B	1.24	-44.94%	2.70%	18.33%	1.47%
CUE	39 Underperform	$43.27M	―	-149.03%	―	69.16%	32.51%
INO	34 Underperform	$58.31M	―	-115.42%	―	-73.83%	34.81%
CYCC	28 Underperform	$38.98M	―	-807.39%	―	-89.76%	80.28%
UNCY	28 Underperform	$61.29M	―	-2355.27%	―	-100.00%	52.65%
APLT	21 Underperform	$47.71M	―	-3179.06%	―	―	―

Sutro Biopharma Corporate Events

Sutro Biopharma Announces Strategic Review and Leadership Change

On March 13, 2025, Sutro Biopharma announced a strategic portfolio review, prioritizing its next-generation ADC pipeline and deprioritizing the development of luveltamab tazevibulin. The company plans to exit its internal GMP manufacturing facility and reduce its workforce by 50%, with estimated restructuring costs of $40 to $45 million. Additionally, key management changes were announced, including the transition of CEO William J. Newell and the appointment of Jane Chung as the new CEO. These changes aim to streamline operations and extend the company’s cash runway into the fourth quarter of 2026.