How much will Orchard Therapeutics owe in December?

In the world of investing, the saying goes, "no risk, no reward." This certainly rings true for Orchard Therapeutics PLC (USA Stocks: ORTX), a biotechnology firm in the healthcare sector. Despite the company's current debt obligations, including short term debt of $15.9M and capital lease obligations of $25.7M, it remains a promising investment opportunity. The company's cash position stands at a robust $68.4M, offering a safety net against its financial obligations. Moreover, with a potential upside price of $29.42, the reward could significantly outweigh the risk for those who maintain their position in ORTX. Orchard Therapeutics PLC is set to release its earnings report tomorrow, with the forthcoming quarterly report anticipated on November 13, 2023. Currently, the Debt to Equity Ratio of Orchard Therapeutics remains relatively stable compared to the previous year. The Price to Book Value is projected to increase to 0.49 in 2023, while the Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) are expected to decrease to negative $158.8 million in the same year. Given the widespread interest in the biotechnology sector, it's worth considering Orchard Therapeutics PLC as a unique investment option. We aim to evaluate whether the company can maintain a manageable level of debt while reducing operating losses.
Published over six months ago
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Reviewed by Vlad Skutelnik

Orchard Therapeutics PLC currently has 58.09 million in liabilities, with a Debt to Equity (D/E) ratio of 0.41. This ratio is approximately average when compared to similar companies. The company's current ratio stands at 4.16, suggesting that it has sufficient liquidity to meet its financial obligations when they are due. Debt can be beneficial for Orchard Therapeutics as long as the company can manage its repayment, either through raising new capital or generating free cash flow. However, if the company fails to meet its legal debt obligations, shareholders could potentially lose their entire investment. It's also worth noting that companies like Orchard Therapeutics PLC often issue additional shares at discounted prices, which can dilute the value of existing shares. In such cases, debt can be a more effective tool for Orchard to invest in high-growth opportunities that yield high returns. When evaluating Orchard Therapeutics' use of debt, it's important to consider it in conjunction with the company's cash and equity positions.

Key Takeaways

Orchard Therapeutics PLC (ORTX) is a promising investment opportunity despite its current debt obligations. The company's Jensen Alpha of 2.32 indicates a potential for higher-than-expected returns, while its Accumulation Distribution of 187.71 suggests a strong buying pressure. Although the company reported a loss in free cash flow of 82.5M, it holds a substantial amount of cash at 68.4M, which could help it navigate through its short-term debt of 9.4M. Therefore, investors are advised to maintain their positions in ORTX, as the company's strong financial indicators outweigh its current debt obligations.
Orchard Therapeutics financial leverage ratio helps determine the effect of debt on the overall profitability of the company. It measures the total debt position of Orchard Therapeutics, including all of Orchard Therapeutics's outstanding debt obligations, and compares it with the equity. In simple terms, the high financial leverage means the cost of production, together with running the business day-to-day, is high, whereas, lower financial leverage implies lower fixed cost investment in the business and generally considered by investors to be a good sign. So if creditors own a majority of Orchard Therapeutics assets, the company is considered highly leveraged. Understanding the composition and structure of overall Orchard Therapeutics debt and outstanding corporate bonds gives a good idea of how risky the capital structure of a business is and if it is worth investing in it. Please read more on our technical analysis page.

How important is Orchard Therapeutics's Liquidity

Orchard Therapeutics financial leverage refers to using borrowed capital as a funding source to finance Orchard Therapeutics PLC ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Orchard Therapeutics financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Financial leverage can amplify the potential profits to Orchard Therapeutics' owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if the firm cannot cover its debt costs. The degree of Orchard Therapeutics' financial leverage can be measured in several ways, including by ratios such as the debt-to-equity ratio (total debt / total equity), equity multiplier (total assets / total equity), or the debt ratio (total debt / total assets). Please check the breakdown between Orchard Therapeutics's total debt and its cash.

Detailed Perspective On Orchard Therapeutics

The entity reported the previous year's revenue of 6.99 M. Net Loss for the year was (150.66 M) with loss before overhead, payroll, taxes, and interest of (76.52 M).

Asset Breakdown

44.8 M
Assets Non Current
210.1 M
Current Assets
Total Assets254.92 Million
Current Assets210.13 Million
Assets Non Current44.79 Million
Goodwill3.96 Million
Tax Assets6.1 Million
"Never put all your eggs in one basket," is a common saying in the world of finance, and it's particularly relevant when considering Orchard Therapeutics PLC (USA Stocks: ORTX). Despite the company's current debt obligations of 58.09M, it's important to note that Orchard Therapeutics has a healthy net asset value of 218.91M, indicating a strong financial position.
The company's debt to equity ratio is a mere 0.41%, which is relatively low, suggesting that the company is not overly reliant on debt to finance its operations. Furthermore, the company's working capital stands at a robust 107.58M, providing it with the necessary funds to meet its short-term obligations. Despite a loss of 31.6M in operating income, the company's market capitalization of 362.73M and a target price of 16 suggest a promising investment opportunity. Therefore, maintaining your position in Orchard Therapeutics could be a wise decision, given its solid financial footing and potential for growth. .

Orchard technical analysis suggests possible turnaround

Orchard Therapeutics PLC's current market risk-adjusted performance, which has increased over 1.0, suggests a potential shift in the company's financial trajectory. This key metric indicates that the firm's returns are adequately compensating for the volatility risk inherent in its share price. The technical analysis of the stock suggests a possible turnaround, making it an appealing option for investors looking to capitalize on the company's improving performance. However, as with any investment, it's essential to consider all factors and risks before making a decision. Orchard Therapeutics PLC is exhibiting above-average volatility over the selected time horizon. Investors should examine Orchard Therapeutics PLC independently to ensure that their intended market timing strategies align with their expectations about Orchard Therapeutics' volatility. Understanding different market volatility trends often assists investors in timing the market. Proper use of volatility indicators allows traders to measure Orchard Therapeutics' stock risk against market volatility during both bullish and bearish trends.
The higher level of volatility that accompanies bear markets can directly impact Orchard Therapeutics' stock price, adding stress to investors as they watch the value of their shares plummet. This typically compels investors to rebalance their portfolios by purchasing different stocks as prices fall. In conclusion, Orchard Therapeutics PLC presents a complex investment opportunity. With a valuation market value of 15.98 and a real value of 16.47, the company's stock is currently trading close to its intrinsic value. The analyst overall consensus is a 'Hold', backed by 3 holds and an estimated target price of 16, which aligns closely with the current market valuation. The possible upside price of 29.42 suggests potential for growth, but investors should also be mindful of the possible downside price of 4.79. Given these factors, it is advisable for investors to closely monitor Orchard Therapeutics PLC's performance before making a decision. .

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Editorial Staff

This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Gabriel Shpitalnik do not own shares of Orchard Therapeutics PLC. Please refer to our Terms of Use for any information regarding our disclosure principles.

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