Terns Pharmaceuticals (TERN) AI Stock Analysis

• Market Cap: $4.18B
• Dividend Yield: N/A
• Average Volume (3M): 1.88M
• Price to Earnings (P/E): ―
• Beta (1Y): 1.38
• Revenue Growth: N/A
• EPS Growth: 12.45%
• Country: US
• Employees: 59
• Sector: Healthcare
• Sector Strength: 45
• Industry: Biotechnology
• EPS (TTM): -0.27
• Shares Outstanding: 106,329,780
• 10 Day Avg. Volume: 1,395,213
• 30 Day Avg. Volume: 1,879,352
• PEG Ratio: 0.42
• Price to Book (P/B): 1.27
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -6.29
• Enterprise Value/Market Cap: 0.81
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: -31.33K
• Enterprise Value/Ebitda: -33.34
• 1Y Price Target: $54.22
• Price Target Upside: 38.21% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 11
• EPS Forecast (FY): -1.18
• Revenue Forecast (FY): $1.07M

• Rating: 52 Neutral
• Price Target: $39.00 ▼(-0.59% Downside)

Overall score is held back primarily by weak operating fundamentals (no revenue, sizable losses, and ongoing cash burn). Offsetting factors include a strong low-debt balance sheet and positive recent corporate developments (promising Phase 1 data and a financing that improves runway). Technicals are broadly neutral and valuation offers limited support due to negative earnings and no dividend.

Positive Factors

Low leverage / strong balance sheet

Terns' near-zero debt and sizeable equity provide enduring financial flexibility typical for early-stage biotech. Low leverage reduces refinancing risk, lets management fund clinical programs or opportunistic deals, and supports multi-year development timelines without immediate debt pressure.

Compelling Phase 1 TERN-701 data

Robust Phase 1 efficacy and tolerability materially raise the clinical probability of success for TERN-701, supporting planned pivotal advancement. Positive, sustained response rates in a refractory population strengthen the drug's competitive profile and justify accelerated development and regulatory planning.

Equity raise materially extends runway

A large underwritten offering that extends funding into 2031 meaningfully reduces near-term financing risk and enables execution of Phase 2/3 plans and initial commercial launch activities. Extended runway allows management to advance multiple clinical milestones without immediate capital pressure.

Negative Factors

No product revenue and persistent losses

The company remains a development-stage enterprise with no recurring product sales and large, persistent operating losses. Absent successful commercialization or partnership revenues, profitability visibility is very low and long-term value depends entirely on clinical and regulatory outcomes.

Sustained cash burn and weak cash generation

Consistent negative operating and free cash flow signals ongoing cash consumption tied to R&D spend. Even with recent financing, sustained burn increases the chance of future dilution if development timelines slip or additional studies are required, constraining strategic optionality.

Concentrated pipeline / single-asset risk

Terns' value is concentrated in its clinical pipeline, particularly TERN-701. This concentration means binary clinical outcomes or regulatory setbacks could materially impair the company's prospects; diversification and product revenues are limited, raising execution and program-specific risk.

Terns Pharmaceuticals Business Overview & Revenue Model

Company Description

Terns Pharmaceuticals, Inc., a clinical-stage biopharmaceutical company, develops small-molecule single-agent and combination therapy candidates for the treatment of non-alcoholic steatohepatitis (NASH) and obesity. The company develops TERN-101, a liver-distributed and non-bile acid farnesoid X receptor agonist, which is in Phase IIa clinical trial for the treatment of NASH; and TERN-201, a vascular adhesion protein-1 inhibitor that is in Phase Ib clinical trial for the treatment of NASH. It also develops TERN-501, a thyroid hormone receptor beta agonist with enhanced liver distribution and metabolic stability that is in Phase I clinical trial for the treatment of NASH; and TERN-601, a small-molecule Glucagon-Like Peptide-1 receptor agonist program that is intended to orally be administered for NASH and metabolic diseases, such as obesity. The company was incorporated in 2016 and is headquartered in Foster City, California.

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

Financial profile is mixed: the balance sheet is strong with very low debt and sizable equity (supports flexibility), but the company has no revenue, a large net loss (TTM ~-$94.4M), and sustained cash burn (TTM FCF ~-$77.7M), which increases financing/runway risk despite limited leverage.

Income Statement

TTM (Trailing-Twelve-Months) results show no revenue and a large net loss of about $94.4M, with EBIT around -$108.5M—indicating the business remains in a heavy investment/burn phase. Losses have been broadly persistent across 2020–2024, and profitability has not yet inflected, which meaningfully weakens earnings quality and visibility. The key positive is that losses are not exploding year-over-year, but the lack of recurring revenue keeps the income statement profile high-risk.

Balance Sheet

The balance sheet is a relative strength: TTM equity is about $284.1M against total debt of roughly $1.0M (very low leverage), supporting financial flexibility typical of earlier-stage biotech. Total assets are about $301.7M, and debt-to-equity is near zero, reducing refinancing risk. The primary weakness is ongoing negative returns on equity (TTM return on equity around -27%), and equity has come down from 2024 levels, consistent with continued operating losses.

Cash Flow

Cash generation remains weak: TTM operating cash flow and free cash flow are both about -$77.7M, reflecting sustained cash burn. Cash burn has risen versus 2024 (operating cash flow roughly -$70.0M), though the company’s cash flow has historically tracked net losses closely (free cash flow to net income ~1x), suggesting limited non-cash distortions. The main risk is duration of the cash runway given persistent negative free cash flow.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	0.00	0.00	0.00	0.00	1.00M	0.00
Gross Profit	-108.00K	0.00	0.00	0.00	1.00M	0.00
EBITDA	-101.49M	-100.97M	-101.68M	-61.00M	-49.35M	-36.63M
Net Income	-94.44M	-88.85M	-90.21M	-60.34M	-50.16M	-29.35M
Balance Sheet
Total Assets	301.65M	363.93M	268.52M	287.03M	168.07M	92.29M
Cash, Cash Equivalents and Short-Term Investments	295.63M	358.16M	263.44M	283.11M	165.98M	74.85M
Total Debt	1.03M	1.35M	603.00K	1.21M	0.00	12.88M
Total Liabilities	17.59M	18.06M	13.15M	10.08M	7.77M	23.70M
Stockholders Equity	284.07M	345.87M	255.37M	276.94M	160.30M	68.59M
Cash Flow
Free Cash Flow	-77.68M	-70.06M	-67.44M	-49.38M	-42.17M	-30.39M
Operating Cash Flow	-77.68M	-70.02M	-67.39M	-49.11M	-41.83M	-29.81M
Investing Cash Flow	-42.39M	-12.41M	-37.99M	-22.27M	-119.70M	6.69M
Financing Cash Flow	702.00K	164.00M	41.95M	167.09M	134.39M	85.52M

Terns Pharmaceuticals Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 39.23
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TERN, the sentiment is Positive. The current price of 39.23 is above the 20-day moving average (MA) of 36.97, above the 50-day MA of 38.71, and above the 200-day MA of 16.38, indicating a bullish trend. The MACD of 0.79 indicates Negative momentum. The RSI at 58.28 is Neutral, neither overbought nor oversold. The STOCH value of 70.98 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TERN.

Terns Pharmaceuticals Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
KROS	62 Neutral	$492.64M	10.73	10.43%	―	37798.31%	―
TYRA	57 Neutral	$1.57B	-16.67	-34.75%	―	―	-17.01%
OLMA	56 Neutral	$1.76B	-13.14	-59.22%	―	―	17.23%
TERN	52 Neutral	$4.18B	―	-29.12%	―	―	12.45%
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%
NRIX	51 Neutral	$1.59B	-5.19	-49.63%	―	48.32%	-1.91%
ANAB	49 Neutral	$1.52B	-19.67	-308.02%	―	196.42%	53.92%

Terns Pharmaceuticals Corporate Events

Terns Pharmaceuticals Expands Global Rights to TERN-701

On January 16, 2026, Terns Pharmaceuticals amended its existing Exclusive Option and License Agreement with Hansoh (Shanghai) Healthtech Co., Ltd., under which Hansoh already held exclusive rights to develop and commercialize TERN-701 for oncology indications in mainland China, Taiwan, Hong Kong and Macau. The amendment grants Terns an exclusive, royalty-bearing, sublicensable and perpetual license, outside the Hansoh Territory, to use certain patents and patent applications invented by Hansoh and its affiliate in connection with TERN-701, replacing a previous non-exclusive, non-sublicensable, royalty-free license held by a Terns subsidiary; in return, Terns will pay Hansoh a $1 million upfront fee and low single-digit tiered royalties on net sales of TERN-701 products covered by those patents, strengthening Terns’ global intellectual property position and commercial flexibility for TERN-701 beyond Greater China.

The most recent analyst rating on (TERN) stock is a Buy with a $41.00 price target. To see the full list of analyst forecasts on Terns Pharmaceuticals stock, see the TERN Stock Forecast page.

Terns Pharmaceuticals Announces Major Stock Offering

On December 9, 2025, Terns Pharmaceuticals announced an underwritten public offering of 16,250,000 shares of common stock at $40.00 per share, with an option for underwriters to purchase an additional 2,437,500 shares. The offering, expected to close on December 11, 2025, aims to raise approximately $705.8 million in net proceeds, which will be used to fund research, clinical trials, and potential commercial launch preparations for TERN-701, among other corporate purposes. This move is expected to bolster Terns’ financial position, enabling it to fund operations into 2031, and strengthen its market positioning in the oncology sector.

The most recent analyst rating on (TERN) stock is a Buy with a $57.00 price target. To see the full list of analyst forecasts on Terns Pharmaceuticals stock, see the TERN Stock Forecast page.

Terns Pharmaceuticals Unveils Promising Phase 1 Trial Data

On December 8, 2025, Terns Pharmaceuticals announced updated data from the Phase 1 CARDINAL trial of TERN-701, presented at the 67th American Society of Hematology Annual Meeting. The trial, which involves patients with previously treated chronic myeloid leukemia, showed promising results with a 74% major molecular response (MMR) rate by 24 weeks across all dose cohorts and a 75% MMR rate at doses above 320 mg. The trial’s safety profile was encouraging, with no dose-limiting toxicities observed, supporting the selection of 320 mg and 500 mg as recommended doses for phase 2. These findings reinforce TERN-701’s potential as a best-in-disease therapy, with plans to advance into pivotal Phase 3 trials in 2026.

The most recent analyst rating on (TERN) stock is a Buy with a $35.00 price target. To see the full list of analyst forecasts on Terns Pharmaceuticals stock, see the TERN Stock Forecast page.