Is Redhill Biopharma outlook positive for January 2024?

Redhill Biopharma currently has liabilities amounting to 122.69 million, with a Debt to Equity (D/E) ratio of 9.89. This suggests that the company may face challenges in generating sufficient cash to meet its financial obligations. Redhill Biopharma has a performance score of 11 on a scale of zero to one hundred. The company's Beta stands at -3.0288, indicating a relatively significant risk compared to the market. As market returns increase, returns on owning Redhill Biopharma are expected to decrease by larger amounts. Conversely, during periods of market instability, Redhill Biopharma is expected to outperform the market. To analyze future returns on Redhill Biopharma, consider using the company's variance, as well as the relationship between the maximum drawdown and semi variance.

Important Highlights

From a valuation perspective, Redhill Biopharma's financials reveal a mixed bag of indicators. Despite a significant net loss of 71.7M and a negative return on assets of 0.17, the company's enterprise value stands at a robust 1.8B, indicating that the market is pricing in future growth potential. The company's Z score of -4.85, however, suggests financial distress, which investors should factor into their risk assessment.
Published over six months ago
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Reviewed by Rifka Kats

In the world of biotech investing, patience is often the key to unlocking substantial rewards. Redhill Biopharma, a player in the healthcare and pharmaceutical sector, seems to be a testament to this adage. Despite a challenging financial year ending in December, with a net income loss of $71.7M and quarterly revenue growth dipping by 0.9%, the company's stock valuation presents a compelling case for potential bullish surge in January 2024. The company's forward PE stands at a whopping 1.4K, hinting at a strong earnings growth expectation. Moreover, the target price of $40 suggests a substantial upside potential from the current levels. Although the debt to equity ratio of 9.89% and a high probability of bankruptcy at 93.49% warrant caution, the company's enterprise value to revenue ratio of 0.6383 and price to sales ratio of 0.73X indicate a relatively undervalued position. Furthermore, with 8.52% of shares owned by institutions, there's a level of confidence in the company's long-term prospects. However, investors should tread carefully considering the company's current ratio of 0.98X, which shows a slight liquidity risk. In conclusion, while Redhill Biopharma carries certain financial risks, the potential for a bullish surge in the coming year cannot be ignored. As many investors are showing increased interest in the pharmaceutical sector, it's appropriate to highlight Redhill Biopharma. What exactly can Redhill Biopharma shareholders expect in January? Is Redhill Biopharma's current valuation justified? We will evaluate the company's valuation to provide a clearer perspective on whether to take a position in the stock.
We determine the current worth of Redhill Biopharma using both absolute as well as relative valuation methodologies to arrive at its intrinsic value. In general, an absolute valuation paradigm, as applied to this company, attempts to find the value of Redhill Biopharma based exclusively on its fundamental and basic technical indicators. By analyzing Redhill Biopharma's financials, quarterly and monthly indicators, and related drivers such as dividends, operating cash flow, and various types of growth rates, we attempt to find the most accurate representation of Redhill Biopharma's intrinsic value. In some cases, mostly for established, large-cap companies, we also incorporate more traditional valuation methods such as dividend discount, discounted cash flow, or asset-based models. As compared to an absolute model, our relative valuation model uses a comparative analysis of Redhill Biopharma. We calculate exposure to Redhill Biopharma's market risk, different technical and fundamental indicators, relevant financial multiples and ratios, and then comparing them to Redhill Biopharma's related companies.

Redhill Biopharma Investment Alerts

Redhill investment alerts and warnings help investors to get more proficient at understanding not only critical technical and fundamental signals but also the significant portfolio-centered indicators. These indicators include beta, alpha, and other risk-related measures that will help you in monitoring Redhill Biopharma performance across your portfolios.Please check all investment alerts for Redhill

Redhill Biopharma Valuation Ratios as Compared to Competition

Our valuation model uses many indicators to compare Redhill value to that of its competitors to determine the firm's financial worth. You can analyze the relationship between different fundamental ratios across Redhill Biopharma competition to find correlations between indicators driving the intrinsic value of Redhill.

Redhill Biopharma Gross Profit

Redhill Biopharma Gross Profit growth is one of the most critical measures in evaluating the company. The Gross Profit growth rate is calculated simply by comparing Redhill Biopharma previous period's values with its current period's values. Each time period you're measuring should be of equal lengths the increase or decrease, in a company's Gross Profit between two periods. Here we show Redhill Biopharma Gross Profit growth over the last 10 years. Please check Redhill Biopharma's gross profit and other fundamental indicators for more details.

What is the case for Redhill Biopharma Investors

The latest price rise of Redhill Biopharma created some momentum for institutional investors as it was traded today as low as 1.37 and as high as 1.51 per share. The company executives may have good odds in positioning the company resources to exploit market volatility in January. The stock standard deviation of daily returns for 90 days investing horizon is currently 33.41. The very high volatility is mostly attributed to the latest market swings and not very good earnings reports from some of the Redhill Biopharma partners.

Margins Breakdown

Redhill profit margins show the degree to which it makes money. Margin indicators are used not only by investors but also by creditors or Redhill Biopharma itself as indicators of financial health and management effectiveness. Please look more closely at the different varieties of Redhill Biopharma profit margins.
EBITDA Margin(0.61)
Gross Margin0.55
Profit Margin(1.25)
Redhill Biopharma Earnings Before Interest Taxes and Depreciation Amortization EBITDA is decreasing over the last 8 years.
Further, Redhill Biopharma Average Assets is quite stable at the moment. Every cloud has a silver lining, and for Redhill Biopharma, the silver lining could be a potential bullish surge in January 2024. Despite a challenging financial landscape marked by a net income loss of $71.7M and an operating income loss of $42.8M, the company's book value stands at 1.086, with a price to book ratio of 7.94X, indicating potential undervaluation. The company's current ratio of 0.98X, although slightly below the ideal, suggests a reasonable ability to meet short-term obligations. However, the high probability of bankruptcy at 93.49% and a high beta of 3.64 signal significant risk. The company's market capitalization of $29.02M, coupled with a target price of $40, suggests potential for growth. Investors should approach with caution, considering both the potential rewards and the inherent risks. .

Our take on today Redhill Biopharma rise

Despite today's uptick in Redhill Biopharma's stock, investors may need to exercise caution. The recent decline in the Treynor Ratio to -1.33 could potentially signal an impending price drop. This ratio, which gauges reward relative to volatility, suggests that the stock may not be providing investors with adequate compensation for its risk level. While today's performance may appear encouraging, investors should keep a close eye on the stock's performance and take this metric into account before making investment decisions. Redhill Biopharma is exhibiting significant volatility in returns over the chosen time horizon. We urge all investors to further investigate this asset to ensure that their market timing strategies align with all expectations about Redhill Biopharma's implied risk. Understanding different market volatility trends can often assist investors in timing the market. Proper utilization of volatility indicators allows traders to measure Redhill Biopharma's stock risk against market volatility during both bullish and bearish trends.
The heightened level of volatility that accompanies bear markets can directly impact Redhill Biopharma's 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, the investment landscape for Redhill Biopharma presents an intriguing picture. Despite the valuation hype value standing at 1.52, the company's real value is pegged at 11.06, which is significantly higher than the current market value of 1.47. This suggests a potential undervaluation of the stock. Additionally, the unanimous consensus among analysts is a 'Strong Buy', with a target price estimated value of 40, offering a possible upside price of 34.88. While the risk of a downside price of 0.0147 exists, it is minimal and should not deter investors looking for long-term growth. Therefore, Redhill Biopharma could be a compelling addition to an investor's portfolio, especially considering the company's fiscal year-end in December. .

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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 Vlad Skutelnik do not own shares of Redhill Biopharma. Please refer to our Terms of Use for any information regarding our disclosure principles.

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