One-glance verdict
Not enough data
Fair value unavailable
Not enough cash-flow history to value this one with our method.
Fundamentals snapshot
Sutro Biopharma, Inc.
STRO · NGM · Healthcare · Biotechnology
Current price
$15.98
52-week range
$7.15 - $43.85
Market cap
$264.97M
Balance sheet
Healthy
-2.50x Concerning
Net cash $153.56M. Interest coverage shows how many times profit covers the interest bill.
What stands out
0 Rewards
1 Risk
0 rewards · 1 risks
View details ↓What this company does
Sutro Biopharma, Inc.
Sutro Biopharma is a healthcare company developing targeted cancer treatments, which work like smart bombs designed to attack tumors while trying to spare healthy cells. Since its drugs are still being tested, the company's main income comes from collaboration agreements (partnerships where larger drug companies pay them to help develop these potential new medicines). The company's future success depends on these treatments proving safe and effective in clinical trials (the required human testing process before a drug can be approved for sale).
How the company got here
Sutro Biopharma was founded in 2003, originally named Fundamental Applied Biology, and is focused on creating new cancer therapies. A key turning point was the development of its unique XpressCF platform, a technology that allows the company to create and manufacture complex medicines outside of living cells. This platform enables the rapid design of potential new drugs, specifically a type of therapy called antibody-drug conjugates (ADCs). Over the years, the company has used this technology to build its own pipeline of cancer-fighting drugs and to form partnerships with large pharmaceutical companies, which has provided funding and validation for its approach. The company went public in 2018, raising money from investors to further fund its drug development.
What it actually does
Sutro Biopharma designs and develops a special kind of cancer treatment called antibody-drug conjugates, or ADCs. Think of an ADC as a guided missile for cancer cells; it combines an antibody (a protein that can find and attach to specific targets on cancer cells) with a powerful cancer-killing drug. This approach aims to deliver the drug directly to the tumor, which can kill the cancer cells while helping to spare healthy cells from the drug's effects. The company's core technology, a cell-free protein synthesis platform, allows it to create these complex medicines with high precision and speed.
Proprietary Pipeline
This is Sutro's primary business, where it develops its own cancer drugs from scratch with the goal of eventually selling them. The company is currently focused on several drug candidates, such as STRO-004, which targets a protein found on various solid tumors. If these drugs prove to be safe and effective in clinical trials (the multi-step process of testing new medicines in people), Sutro could earn significant revenue (money a company receives from its business activities) from their sales. This segment represents the company's long-term bet on its own scientific discoveries and is a major focus of its spending and strategy.
Collaborations and Licensing
Sutro also makes money by partnering with other, often larger, pharmaceutical companies like Astellas and Merck. In these arrangements, Sutro provides access to its specialized drug-making technology and expertise to help the partner develop new medicines. In return, the partner company pays Sutro upfront fees, payments for hitting specific research and development goals, called milestone payments, and a percentage of future sales, known as royalties. These collaborations provide Sutro with more immediate revenue and validate its technology, while the partners take on the primary costs of clinical development and selling the final product.
What management is betting on now
The company's leadership is currently focused on advancing its next-generation antibody-drug conjugates (ADCs), particularly its lead wholly-owned drug candidate, STRO-004. They are also developing ADCs that can carry two different cancer-killing payloads, which could be more effective against tumors that become resistant to treatment. A key part of their strategy is to continue forming high-value partnerships with other pharmaceutical companies to bring in non-dilutive funding (money that doesn't require giving up ownership in the company) and expand the use of their technology. Recently, the company has restructured to reduce costs and focus its resources on these priority programs, aiming to have enough cash to reach key milestones in its clinical trials.
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.
Revenue
$9.84M
Net income
$-38.53M
Diluted EPS
-2.33
Operating cash flow
$-38.29M
Free cash flow
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Revenue
$14.52M
Net income
$-38.48M
Diluted EPS
-2.94
Operating cash flow
$-42.26M
Free cash flow
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Revenue
$11.65M
Net income
$-46.76M
Diluted EPS
-20.77
Operating cash flow
$-26.43M
Free cash flow
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Revenue
$9.69M
Net income
$-56.86M
Diluted EPS
-0.67
Operating cash flow
$-38.19M
Free cash flow
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Revenue
$63.74M
Net income
$-11.50M
Diluted EPS
-0.14
Operating cash flow
$-44.72M
Free cash flow
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Revenue
$17.40M
Net income
$-75.97M
Diluted EPS
-0.91
Operating cash flow
$-67.88M
Free cash flow
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Revenue
$14.81M
Net income
$-72.44M
Diluted EPS
-0.83
Operating cash flow
$-71.74M
Free cash flow
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Revenue
$8.52M
Net income
$-48.79M
Diluted EPS
-0.59
Operating cash flow
$-64.52M
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Is it cheap or expensive?
Fair value — vs current price $15.98
We couldn't calculate a fair value right now.
Is it drowning in debt?
Healthy
Net cash $153.6M - more cash than debt. Interest coverage -2.5x.
Net debt
$-153.56M
Interest coverage
-2.50x
Sutro Biopharma, Inc.'s profit covers its interest bill about 0.0 times over. which is weaker than most peers shown here and 2 peers sit below 1x, which is the danger zone where profit does not fully cover the interest bill.
Healthy
Worse cushion
Baseline
Better cushion
STRO
BASELINE
Sutro Biopharma, Inc.
Total debt $10.78M Interest coverage -2.50x This is the baseline the peer rows are being compared against.
Total debt $438.19M Interest coverage -2.08x Neither company has much profit cushion over interest right now.
Total debt $5.70M Interest coverage -4.30x Neither company has much profit cushion over interest right now.
What you should know
The case for and against STRO
0 Rewards
1 Risk
Rewards
Risks
-
Operating margin compressed from -190.3% to -301.7% over 3 years.
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)
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Forward P/E
-2.57x
P/B
-2.56x
P/S
5.80x
EV/EBITDA
-0.89x
PEG ratio
—
Profitability
How much profit each dollar creates
Gross margin
-216.7%
Operating margin
-301.7%
Net margin
0.0%
ROE
—
ROA
-36.1%
Health
Liquidity and balance-sheet strength
Debt / equity
—
Current ratio
3.32x
Quick ratio
3.22x
Total debt
$10.78M
Total cash
$164.35M
Growth
How the business has been compounding
Revenue TTM
$45.70M
Revenue 5Y CAGR
13.4%
EPS TTM
-17.37
EPS 5Y CAGR
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Cash flow
How much cash the business throws off
Operating CF TTM
$-145.17M
Free CF TTM
$-178.93M
FCF margin
-391.5%
Dividend
Shareholder payout
Yield
—
Payout ratio
0.0%
Last ex-div date
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