Springworks Therapeutics (SWTX) AI Stock Analysis

• Market Cap: $3.46B
• Dividend Yield: N/A
• Average Volume (3M): 5.08M
• Price to Earnings (P/E): ―
• Beta (1Y): 1.50
• Revenue Growth: 3417.33%
• EPS Growth: 30.06%
• Country: US
• Employees: 368
• Sector: Healthcare
• Sector Strength: 69
• Industry: Biotechnology
• EPS (TTM): -3.48
• Shares Outstanding: 74,984,360
• 10 Day Avg. Volume: 10,919,257
• 30 Day Avg. Volume: 5,078,919
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.00
• Price to Cash Flow (P/CF): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 0.69
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: 13.34
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $58.75
• Price Target Upside: 27.05% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 8

Springworks Therapeutics is positioned for potential growth due to strategic corporate events, including a merger with Merck and an FDA approval. However, financial challenges such as negative profitability and cash flow persist, weighing down the overall score.

Positive Factors

Market Expansion

The acquisition by Merck KGaA is expected to strengthen their US presence and allow expansion into international markets.

Product Launch

FDA approval for Gomekli (mirdametinib) in adult and pediatric patients with NF1-PN tumors boosts the company's potential market reach.

Therapeutic Advancements

OGSIVEO drove a statistically significant response rate improvement vs. placebo, with significantly reduced pain and symptom severity, and improvements in physical functioning, role functioning, and quality of life reported by patients.

Negative Factors

M&A Interest

A higher bid for SpringWorks Therapeutics is unlikely, indicating limited upside potential for shareholders.

Market Uncertainty

The market for rare tumors like those targeted by SpringWorks is uncertain, affecting investor confidence and the valuation of the acquisition.

Valuation Concerns

A price of $3.4B EV is only 2x consensus peak sales of $1.7B, which is considered shockingly low for a company not in distress.

Springworks Therapeutics Business Overview & Revenue Model

Company Description

SpringWorks Therapeutics, Inc. acquires, develops, and commercializes medicines for underserved patient populations suffering from rare diseases and cancer. Its lead product candidate is nirogacestat, an oral small molecule gamma secretase inhibitor that is in Phase III clinical trial for the treatment of desmoid tumors. The company is also developing mirdametinib, an oral small molecule MEK inhibitor that is in Phase 2b clinical trials for the treatment of neurofibromatosis type 1-associated plexiform neurofibromas, as well as Phase 1/2a clinical trial for the treatment of NF1-PN; mirdametinib + lifirafenib, a combination therapy that is in Phase 1b/2 clinical trial in patients with advanced or refractory solid tumors; and mirdametinib in monotherapy and combination approaches to treat solid tumors. In addition, it develops BGB-3245, an oral selective small molecule inhibitor of monomeric and dimeric forms of activating BRAF mutations, which is in Phase I clinical trial. The company has collaborations with BeiGene, Ltd., GlaxoSmithKline LLC, and Allogene to develop combination approaches with nirogacestat and mirdametinib; and license agreements with Pfizer Inc. for nirogacestat and mirdametinib. It also has a license agreement with Katholieke Universiteit Leuven and the Flanders Institute for Biotechnology for a portfolio of novel small molecule inhibitors of the TEA Domain; and Dana-Farber Cancer Institute for a portfolio of novel small molecule inhibitors of Epidermal Growth Factor Receptor. In addition, the company has clinical collaboration agreement with Janssen Biotech, Inc., Precision BioSciences, Inc., Seagen Inc., and AbbVie, Inc. SpringWorks Therapeutics, Inc. was founded in 2017 and is headquartered in Stamford, Connecticut.

How the Company Makes Money

Springworks Therapeutics makes money primarily through the development and commercialization of its investigational therapies. The company's revenue model is centered on advancing its drug candidates through clinical trials and securing regulatory approval to bring these therapies to market. Key revenue streams include potential sales of approved drugs, milestone payments, and royalties from partnerships or collaborations with other pharmaceutical companies. Additionally, Springworks may engage in licensing agreements where they allow other companies to develop or commercialize their products in exchange for financial compensation. Significant partnerships with larger pharmaceutical companies can also contribute to its earnings, providing funding and resources to support its research and development activities.

Springworks Therapeutics Financial Statement Overview

Summary

Springworks Therapeutics has shown revenue growth but faces profitability challenges with deeply negative EBIT and EBITDA margins. The balance sheet is stable with low leverage, but declining equity ratios and negative cash flow highlight financial risks.

Income Statement

Springworks Therapeutics has experienced volatile revenue trends, with significant revenue growth from 2023 to 2024. However, persistent negative net income and EBIT margins indicate ongoing profitability challenges. The EBIT and EBITDA margins are deeply negative, reflecting high operating expenses relative to revenue.

Balance Sheet

The company's debt-to-equity ratio remains low, indicating minimal leverage. However, the return on equity is negative due to net losses, and the equity ratio has decreased over time, reflecting a weakening asset base relative to equity. The strong cash position suggests liquidity strength, though declining equity ratios highlight potential financial risks.

Cash Flow

Springworks Therapeutics has negative operating cash flow, indicating cash consumption in operations. Despite free cash flow improvement from 2023 to 2024, it remains negative, posing concerns about cash sustainability. The operating cash flow to net income ratio is not favorable, reflecting inefficiencies in converting revenue to cash.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
191.59M	5.45M	6.15M	0.00	35.00M
	Gross Profit
179.04M	5.03M	4.25M	-490.00K	34.65M
	EBIT
-278.13M	-343.01M	-280.67M	-173.47M	-46.32M
	EBITDA
-278.13M	-341.35M	-280.67M	-172.98M	-45.98M
	Net Income Common Stockholders
-258.13M	-325.10M	-274.16M	-173.21M	-44.24M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
307.99M	479.20M	597.01M	373.50M	508.48M
	Total Assets
587.28M	725.79M	630.24M	452.49M	576.19M
	Total Debt
7.91M	7.06M	5.25M	1.29M	2.73M
	Net Debt
-61.84M	-169.00M	-62.24M	-102.67M	-144.35M
	Total Liabilities
106.17M	99.57M	72.05M	30.10M	19.13M
	Stockholders Equity
481.10M	626.22M	-569.93M	422.40M	557.06M
Cash Flow		Free Cash Flow
-180.05M	-230.18M	-171.76M	-129.89M	-32.83M
	Operating Cash Flow
-175.60M	-222.79M	-161.56M	-127.88M	-32.19M
	Investing Cash Flow
64.55M	34.75M	-215.60M	83.59M	-418.83M
	Financing Cash Flow
4.76M	296.64M	340.70M	1.16M	270.49M

Springworks Therapeutics Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 46.24
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SWTX, the sentiment is Positive. The current price of 46.24 is above the 20-day moving average (MA) of 40.14, below the 50-day MA of 46.96, and above the 200-day MA of 39.42, indicating a neutral trend. The MACD of -0.28 indicates Negative momentum. The RSI at 59.00 is Neutral, neither overbought nor oversold. The STOCH value of 94.97 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SWTX.

Springworks Therapeutics Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
AKRO	60 Neutral	$3.36B	―	-39.22%	―	―	-31.37%
PTGX	56 Neutral	$2.72B	10.55	54.39%	―	624.05%	―
SWTX	54 Neutral	$3.46B	―	-46.62%	―	3417.33%	30.06%
RYTM	54 Neutral	$3.76B	―	-272.15%	―	68.06%	-35.93%
Sector *	51 Neutral	$5.35B	3.41	-40.83%	2.89%	18.11%	2.60%
CRSP	50 Neutral	$3.27B	―	-19.20%	―	-89.95%	-123.71%
RARE	49 Neutral	$3.57B	―	-214.50%	―	29.01%	23.93%

Springworks Therapeutics Corporate Events

SpringWorks Therapeutics Merges with Merck for $3.9 Billion

On April 27, 2025, SpringWorks Therapeutics entered into a merger agreement with Merck KGaA, Darmstadt, Germany, where SpringWorks will become a wholly owned subsidiary of Merck. The acquisition, valued at approximately $3.9 billion, aims to strengthen Merck’s presence in the U.S. healthcare market and expand the reach of SpringWorks’ therapies for rare tumors. The merger is expected to enhance Merck’s revenue and earnings growth, while providing SpringWorks with the opportunity to leverage Merck’s global resources and expand its market reach.

Spark’s Take on SWTX Stock

According to Spark, TipRanks’ AI Analyst, SWTX is a Neutral.

Springworks Therapeutics exhibits strong potential following the recent FDA approval, which could significantly boost its market presence. However, the company continues to face challenges with profitability and cash flow, which weigh down its overall score. Technical indicators are mixed, and the negative P/E ratio indicates ongoing financial hurdles. The strategic FDA approval provides a bright spot in an otherwise challenging financial landscape.

To see Spark’s full report on SWTX stock, click here.

Springworks Therapeutics Gains FDA Approval for GOMEKLI

On February 11, 2025, SpringWorks Therapeutics announced the FDA approval of GOMEKLI™ (mirdametinib), a treatment for neurofibromatosis type 1 with symptomatic plexiform neurofibromas, marking it as the first approved medicine for the condition. Based on Phase 2b trial results, GOMEKLI demonstrated significant tumor volume reduction and a manageable safety profile, offering a new therapeutic option for a condition affecting approximately 40,000 people in the US. This approval also granted SpringWorks a rare pediatric disease priority review voucher, further strengthening its market position in treating severe rare diseases.