One-glance verdict
Overvalued
$27.37 our estimate vs market $57.68
Wall Street consensus: $71.00 (159.4% higher than our fair-value estimate)
111% above our estimate, beyond the bull case
Fundamentals snapshot
Eton Pharmaceuticals, Inc.
ETON · NGM · Healthcare · Drug Manufacturers - Specialty & Generic
Current price
$57.68
52-week range
$14.27 - $66.37
Market cap
$1.65B
Balance sheet
Distressed
-0.23x Concerning
Net debt $2.38M. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
1 Risk
3 rewards · 1 risks
- Reward Revenue grew 32.1% last year.
- Reward Returns 36.0% on equity, ahead of 80% of its peers.
- Reward Free cash flow was positive in 4/10 years.
- Risk Insider ownership is only 4.9% (peer median: 4.9%).
What this company does
Eton Pharmaceuticals, Inc.
Eton Pharmaceuticals is a drug company that develops and sells medicines for rare diseases, which are serious conditions that affect a small number of people. The company makes money from its existing portfolio of specialized treatments and aims to grow by getting new drugs in its pipeline (the set of products a company is developing) approved for sale, a market that often has little competition.
How the company got here
Eton Pharmaceuticals was founded in 2017 with a specific focus on developing and selling treatments for rare diseases. Instead of discovering new molecules from scratch, the company's strategy is often to find existing drugs and improve them, for instance by creating a liquid version that's easier for children to take. A key turning point was a strategic shift to focus heavily on acquiring and commercializing these specialty drugs, which has led to very rapid sales growth. The company has built its portfolio by acquiring or licensing the rights to sell various medicines from other pharmaceutical companies.
What it actually does
Eton Pharmaceuticals is a drug company that sells medicines for conditions that affect a very small number of people, often children. These are known as "rare diseases." Think of them as specialists who find, get approval for, and sell drugs that larger companies might overlook because the number of patients is not very large. Their products treat serious conditions like severe growth failure, adrenal insufficiency (where the body doesn't produce enough of a critical hormone), and rare genetic disorders like Wilson disease. A big part of their work involves making medicines more suitable for the patients who need them, such as creating oral liquid solutions for those who cannot swallow pills.
Rare Disease Pharmaceuticals
The company operates as a single business focused on selling a portfolio of prescription drugs for rare diseases. This is its only way of making money. Patients, through their insurance, pay for these specialized medicines that are prescribed by doctors. Some of their key products include Increlex for severe growth problems in children, Alkindi Sprinkle for adrenal insufficiency, and Galzin for a genetic disorder called Wilson disease. While it has more than ten products on the market, no single drug dominates the business; instead, revenue (the total money earned from sales) comes from the combined sales of its entire group of specialized drugs.
What management is betting on now
Management's current strategy is a three-part plan they call their "3-pillar growth strategy." The first part is growing sales of their existing drugs organically (selling more to the patients who need them). The second is to continue developing their own new products in their pipeline (the set of drugs a company is currently developing). The final part is to continue acquiring or licensing new drugs from other companies to add to their portfolio. They are focused on making the business more profitable, with a goal of increasing their adjusted EBITDA margin (a measure of how much cash profit the company makes from its revenue before accounting for interest, taxes, and other non-operational costs) to over 35%.
Price history
How the share price has moved
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Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2024 Q3
$2.95M
FY2024 Q4
$-777.00K
FY2025 Q1
$2.09M
FY2025 Q2
$7.96M
FY2025 Q3
$11.74M
FY2025 Q4
$-11.60M
FY2026 Q1
$7.33M
FY2026 Q2
$7.25M
Revenue
$37.59M
Net income
$11.58M
Diluted EPS
0.35
Operating cash flow
$7.25M
Free cash flow
$7.25M
Fetching…
Sources
Revenue
$24.27M
Net income
$1.55M
Diluted EPS
0.05
Operating cash flow
$7.41M
Free cash flow
$7.33M
Fetching…
Sources
Revenue
$21.28M
Net income
$1.48M
Diluted EPS
—
Operating cash flow
$-11.55M
Free cash flow
$-11.60M
Fetching…
Sources
Revenue
$22.46M
Net income
$-1.93M
Diluted EPS
-0.07
Operating cash flow
$12.03M
Free cash flow
$11.74M
Fetching…
Sources
Revenue
$18.93M
Net income
$-2.58M
Diluted EPS
-0.10
Operating cash flow
$7.96M
Free cash flow
$7.96M
Fetching…
Sources
Revenue
$17.28M
Net income
$-1.57M
Diluted EPS
-0.06
Operating cash flow
$2.09M
Free cash flow
$2.09M
Fetching…
Sources
Revenue
$11.65M
Net income
$-598.00K
Diluted EPS
—
Operating cash flow
$-765.00K
Free cash flow
$-777.00K
Fetching…
Sources
Revenue
$10.32M
Net income
$627.00K
Diluted EPS
0.02
Operating cash flow
$2.95M
Free cash flow
$2.95M
Fetching…
Sources
Is it cheap or expensive?
Fair value $27.37 vs current price $57.68
Wall Street consensus is the average analyst price target: $71.00 (159.4% higher than our fair-value estimate).
Our most-likely fair value is $27.37 a share — about 52.6% below today's price of $57.68, so the stock currently looks expensive (overvalued).
Is it drowning in debt?
Distressed
Net debt $2.4M. Interest coverage -0.2x.
Net debt
$2.38M
Interest coverage
-0.23x
Eton Pharmaceuticals, Inc.'s profit covers its interest bill about 0.0 times over. which is weaker than most peers shown here.
Distressed
Worse cushion
Baseline
Better cushion
ETON
BASELINE
Eton Pharmaceuticals, Inc.
Total debt $29.23M Interest coverage -0.23x This is the baseline the peer rows are being compared against.
Total debt $626.03M Interest coverage 4.05x This peer still has a real interest-payment cushion, while ETON does not.
Total debt $412.12M Interest coverage 1.31x This peer still has a real interest-payment cushion, while ETON does not.
Total debt $160.19M Interest coverage 14.23x This peer still has a real interest-payment cushion, while ETON does not.
What you should know
The case for and against ETON
3 Rewards
1 Risk
Rewards
-
Revenue grew 32.1% last year.
-
Returns 36.0% on equity, ahead of 80% of its peers.
-
Free cash flow was positive in 4/10 years.
Risks
-
Insider ownership is only 4.9% (peer median: 4.9%).
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
147.90x
Forward P/E
22.36x
P/B
35.02x
P/S
15.61x
EV/EBITDA
65.58x
PEG ratio
—
Profitability
How much profit each dollar creates
Gross margin
61.4%
Operating margin
35.8%
Net margin
12.0%
ROE
36.0%
ROA
11.9%
Health
Liquidity and balance-sheet strength
Debt / equity
0.63x
Current ratio
1.52x
Quick ratio
1.15x
Total debt
$29.23M
Total cash
$26.84M
Growth
How the business has been compounding
Revenue TTM
$105.59M
Revenue 5Y CAGR
38.3%
EPS TTM
0.39
EPS 5Y CAGR
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Cash flow
How much cash the business throws off
Operating CF TTM
$15.13M
Free CF TTM
$10.19M
FCF margin
9.7%
Dividend
Shareholder payout
Yield
—
Payout ratio
0.0%
Last ex-div date
—