Terns Pharmaceuticals (TERN) AI Stock Analysis

• Market Cap: $186.82M
• Dividend Yield: N/A
• Average Volume (3M): 1.18M
• Price to Earnings (P/E): ―
• Beta (1Y): 1.52
• Revenue Growth: N/A
• EPS Growth: 10.98%
• Country: US
• Employees: 59
• Sector: Healthcare
• Sector Strength: 70
• Industry: Biotechnology
• EPS (TTM): -1.13
• Shares Outstanding: 87,297,630
• 10 Day Avg. Volume: 1,584,290
• 30 Day Avg. Volume: 1,184,609
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• Price to Cash Flow (P/CF): -4.30
• 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: $18.00
• Price Target Upside: 741.12% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 5

Terns Pharmaceuticals is in a challenging position with no revenue and considerable net losses, typical of early-stage biotech firms. The strong cash position and low debt levels offer some stability, but reliance on external funding and successful product development are crucial. Technical indicators show negative momentum, but the stock may be oversold. The strategic appointment of a new CFO could enhance financial leadership, offering some positive sentiment to investors.

Positive Factors

Clinical Trials

The '701 treatment demonstrated a cumulative molecular response rate of 50% in non-T315l mutation patients with over 3 months of treatment.

Financial Resources

TERN has a substantial cash reserve of $358M, providing operational expenses coverage into 2028.

Leadership and Management

The new CFO, Andrew Gengos, brings considerable biotech, financial, and consulting industry experience, which is expected to positively influence the company.

Negative Factors

Clinical and Regulatory Risks

Key risks include clinical and regulatory risks that are most material to the Market Perform rating.

Financial Performance

TERN reported a net loss of $22M for 4Q24.

Market Risks

A differentiation thesis is not clear at the moment, given the increasing competitiveness of both the CML and obesity treatment landscape.

Terns Pharmaceuticals Business Overview & Revenue Model

Company Description

Terns Pharmaceuticals (TERN) is a biopharmaceutical company dedicated to developing and commercializing innovative therapies for the treatment of liver diseases and cancer. The company focuses on addressing significant unmet medical needs by advancing a robust pipeline of small-molecule therapeutics. Terns Pharmaceuticals operates within the healthcare sector, specifically targeting conditions such as non-alcoholic steatohepatitis (NASH) and other liver-related diseases, utilizing its expertise in drug discovery and development.

How the Company Makes Money

Terns Pharmaceuticals primarily generates revenue through the development and commercialization of its proprietary drug candidates. The company invests in research and development to advance its pipeline of small-molecule therapeutics through various stages of clinical trials. Revenue is expected from the successful approval and commercialization of these drug candidates, either through direct sales or through licensing agreements with larger pharmaceutical companies. Additionally, Terns may enter into strategic partnerships and collaborations that provide milestone payments and royalties based on the successful progress and commercialization of its drug candidates. These partnerships can significantly contribute to the company's earnings by leveraging external resources and expertise to accelerate the development of its therapies.

Terns Pharmaceuticals Financial Statement Overview

Summary

Terns Pharmaceuticals faces challenges typical of early-stage biotechnology firms, with no revenue and significant net losses. The strong cash position and low debt levels provide some financial stability, but the company requires successful product development and commercialization to improve its financial health. Sustained cash burn poses a risk if external funding becomes harder to secure.

Income Statement

Terns Pharmaceuticals has consistently reported zero revenue for the past several years, indicating a lack of commercialized products. The net losses are significant, and EBIT and EBITDA margins are negative, reflecting ongoing operational challenges. There is no revenue growth, highlighting the company's struggle to generate sales.

Balance Sheet

The company's balance sheet shows a strong cash position with cash and short-term investments significantly exceeding total debt, resulting in negative net debt. The debt-to-equity ratio remains low, indicating limited leverage. However, the equity ratio has decreased slightly, suggesting potential concerns about asset management.

Cash Flow

Operating cash flows are negative, indicating ongoing operational cash burn, which is common in the biotechnology industry before product commercialization. The company has managed to raise cash through financing activities, ensuring liquidity. However, free cash flow remains negative, reflecting the need for continued external funding.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
0.00	0.00	0.00	1.00M	0.00
	Gross Profit
0.00	-881.00K	-1.03M	488.00K	-394.00K
	EBIT
-101.87M	-102.56M	-62.03M	-49.86M	-37.02M
	EBITDA
-101.87M	-102.27M	-58.95M	-49.35M	-36.63M
	Net Income Common Stockholders
-88.85M	-90.21M	-60.34M	-50.16M	-40.57M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
358.16M	263.44M	283.11M	165.98M	74.85M
	Total Assets
363.93M	268.52M	287.03M	168.07M	92.29M
	Total Debt
1.35M	603.00K	1.21M	0.00	12.88M
	Net Debt
-160.09M	-79.32M	-142.03M	-47.70M	-61.97M
	Total Liabilities
18.06M	13.15M	10.08M	7.77M	23.70M
	Stockholders Equity
345.87M	255.37M	276.94M	160.30M	68.59M
Cash Flow		Free Cash Flow
-70.06M	-67.44M	-49.38M	-42.17M	-30.39M
	Operating Cash Flow
-70.02M	-67.39M	-49.11M	-41.83M	-29.81M
	Investing Cash Flow
-12.41M	-37.99M	-22.27M	-119.70M	6.69M
	Financing Cash Flow
164.00M	41.95M	167.50M	134.39M	85.52M

Terns Pharmaceuticals Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 2.14
• 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 TERN, the sentiment is Negative. The current price of 2.14 is below the 20-day moving average (MA) of 2.75, below the 50-day MA of 3.46, and below the 200-day MA of 6.23, indicating a bearish trend. The MACD of -0.30 indicates Positive momentum. The RSI at 26.96 is Positive, neither overbought nor oversold. The STOCH value of 1.35 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TERN.

Terns Pharmaceuticals Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
AKRO	60 Neutral	$2.77B	―	-39.22%	―	―	-31.37%
MDGL	54 Neutral	$6.79B	―	-80.35%	―	―	-10.89%
GNFT	48 Neutral	$168.89M	7.00	26.13%	―	243.10%	―
Sector *	48 Neutral	$6.25B	1.14	-46.26%	2.69%	19.24%	1.75%
TERN	44 Neutral	$186.82M	―	-29.56%	―	―	10.98%
VKTX	42 Neutral	$2.42B	―	-17.90%	―	―	-10.27%
ENSC	20 Underperform	$3.23M	―	-471.82%	―	133.58%	82.60%

Terns Pharmaceuticals Corporate Events

Terns Pharmaceuticals Appoints Andrew Gengos as CFO

On February 22, 2025, Terns Pharmaceuticals announced the appointment of Andrew Gengos as Chief Financial Officer, effective February 24, 2025. Mr. Gengos brings 25 years of experience in finance and corporate strategy within the biotechnology industry, having held senior roles at companies such as Athira Pharma and Cyteir Therapeutics. This strategic appointment is expected to bolster Terns’ financial leadership as it advances its oncology and obesity programs. The transition also involves Amy Burroughs and David Strauss stepping down from their roles as principal financial officer and principal accounting officer, respectively, while continuing in other capacities within the company.

Terns Pharmaceuticals Appoints Robert Azelby to Board

On February 20, 2025, Carl Gordon resigned from the Board of Directors of Terns Pharmaceuticals, and Robert Azelby was appointed as a new member and a part of the Compensation Committee. Mr. Azelby, a seasoned executive with extensive experience in the biopharmaceutical industry, is expected to bring strategic and operational expertise, particularly in advancing Terns’ oncology programs, such as TERN-701 for chronic myeloid leukemia, into late-stage studies.

Terns Pharmaceuticals CFO Resignation and Leadership Transition

On February 1, 2025, Terns Pharmaceuticals, Inc. announced the resignation of Chief Financial Officer Mark Vignola, Ph.D., as per the Vignola Transition Agreement. His departure was amicable and followed by a consulting arrangement, allowing Dr. Vignola to continue contributing as an independent contractor until July 31, 2025. Amy Burroughs, the Chief Executive Officer, assumed the role of principal financial officer, and David Strauss, Vice President of Finance and Controller, took on the position of principal accounting officer on an interim basis. This transition aims to ensure continuity in the company’s financial leadership.