Stocks’ Details

Alteryx, Inc.

Q1FY21 Results Update: Alteryx, Inc. (NYSE: AYX) operates in the analytic process automation space, and automates analytics, data science and processes to accelerate the business of its clients. The market capitalization of the company as on 05 May 2021, stood at ~$5.30 billion. During the first quarter of FY21, the company delivered decent growth of ~9% in revenues to ~$119 million when compared to the previous corresponding period. The annual recurring revenue stood at ~$513 million. It reported an improvement in the gross profit to $107.9 million, with a margin of 91%. The net loss attributable to the stockholders was $40.7 million during the period. It ended the period with a cash position of ~$1 billion as of 31 March 2021.

Q1FY21 Financial Performance (Source: Company Reports)

Key Risks: The company operates in a sector where is it is bound to face competition from its peers for a larger share of the market pie. In this regard, it has to keep innovating itself its offering in order to enhance customer experiences and win client deals.  

Outlook: The company expects the revenue to be in the range of ~$111 million to ~$114 million in Q2FY21, and loss from operations is anticipated at ~$22 million to ~$19 million during the period. It expects full-year 2021 revenue to be between ~$565 million to ~$575 million and anticipates ARR to be ~$635 million as of 31 December 2021.

Valuation Methodology: EV/Sales Multiple Based Relative Valuation (Illustrative)

Data Source: Refinitiv, Thomson Reuters, Analysis by Kalkine Group

*% Premium/(Discount) is based on our assessment of the company’s NTM trading multiple after considering its key growth drivers, economic moat, stock's historical trading multiples versus peer average/median, and investment risks.

Stock Recommendation: On 24 March 2021, AYX has announced a partnership with Tech Data Americas, under which Tech Data and its partners will have access to the Alteryx unified platform. The stock of AYX is trading below its average 52-weeks’ levels of $185.75-$74.72. The stock of AYX gave a negative return of ~6.25% in the past one month and a negative return of ~7.22% in the past one week. On a technical analysis front, the stock of AYX has a support level of ~$73.949 and a resistance level of ~$97.68. We have valued the stock using an EV/Sales multiple-based illustrative relative valuation and have arrived at a target price of low double-digit upside (in % terms). We believe that the company can trade at a slight premium to its peer median EV/Sales (NTM Trading multiple), considering the improvement in financials, and key strategic partnerships. For the purpose, we have taken peers such as Oracle Corp (NYSE: ORCL), Splunk Inc (NASDAQ: SPLK), Dynatrace Inc (NYSE: DT), to name a few. Considering the improvement in financial performance, growth in ARR and a decent cash position, we recommend a ‘Buy’ rating on the stock at the closing market price of $79.07, up by 3.51% as on May 05, 2021.

G1 Therapeutics, Inc.

Q1FY21 Results Update: G1 Therapeutics, Inc. (NASDAQ: GTHX) is a commercial-stage oncology company. The market capitalization of the company as on 05 May 2021 stood at ~$829.53 million. The company reported total revenues of $14.2 million during the quarter, which includes approximately $0.6 million in initial net product sales of COSELA and license revenue of $13.6 million. It ended the period with a cash position of ~$279 million as of 31 March 2021, compared to $207.3 million as of 31 December 2020.

Q1FY21 Financial Performance (Source: Company Reports)

Initiation of Phase 3 Registration Study of COSELA: As per a recent update, the company has announced the initiation of PRESERVE 2, which is a Phase 3, randomized, double-blind, placebo-controlled study of COSELA. The study comprises of patients who receives first or second chemotherapy for breast cancer.

Key Risks: GTHX is faced with the risk of confirmation of approval for its products and processes. Any unfavourable decision by the regulatory authorities might impact the profitability of the company in the long run.

Outlook: As per the company, it expects its current financial position to be sufficient to fund its operations and capital expenditures into 2023.

Stock Recommendation: On 2 March 2021, the company has announced that COSELA as an injection is available in the US, following the approval from the US FDA on 12 February 2021.  The stock of GTHX is trading below its average 52-weeks’ levels of $37.07-$10.81. The stock of GTHX gave a positive return of ~26.97% in the past nine months and a negative return of ~12.63% in the past one week. On a technical analysis front, the stock of GTHX has a support level of ~$18.81 and a resistance level of ~$23.13. On a TTM basis, the stock of GTHX is trading at an EV/Sales multiple of 18.1x, lower than the industry median (Biotechnology & Medical Research) of 25.9x. Considering the current trading levels and the valuation on TTM basis, revenue inflow, comfortable cash position, initiation of Phase 3 Registration Study of COSELA and the key risks associated with the business, we recommend a ‘Speculative Buy’ rating on the stock at the closing price of $19.77, down by 2.51% as on May 05, 2021.

Chiasma, Inc.

Merger Agreement: Chiasma, Inc. (NASDAQ: CHMA) is a commercial-stage biopharmaceutical company, which is focused on developing and commercializing oral therapies for patients with serious chronic diseases.  The market capitalization of the company as on 05 May 2021, stood at ~$230.21 million. The company has recently entered into a merger agreement for its acquisition by Amryt Pharma plc, which is a biopharmaceutical company. The merger will help in unlocking the potential value of Chiasma efficiently for both its patients and for its shareholders. Under the terms of the transaction, each share of CHMA common stock will be exchanged for 0.396 Amryt American Depositary Shares (“ADSs”), each representing five Amryt ordinary shares. The transaction is expected to close in Q3 2021, subject to the satisfaction or waiver of closing conditions.

Q1FY21 Results Update: The company reported sales of MYCAPSSA at $1.9 million during the period, compared to sales of $1 million in Q4FY20. There was an increase in SG&A expenses to $15.7 million in Q1FY21, compared to $7.6 million in the pcp due to an increase in commercial activities and other administrative costs. It reported a net loss of $30.5 million during the quarter. The cash position was at $115 million as of the end of the quarter.

Q1FY21 Financial Performance (Source: Company Reports)

Key Risks: The company has a considerable amount of cash on its balance sheet, and as such, it is exposed to the risk of change in interest rate.  

Outlook: The proposed acquisition of the company by Amryt Pharma is expected to deliver annual cost synergies of approximately $50 million, and it will be revenue and EBITDA accretive and cash generative in the first full year of combined operations.

Valuation Methodology: EV/Sales Multiple Based Relative Valuation (Illustrative)

Data Source: Refinitiv, Thomson Reuters, Analysis by Kalkine Group

*% Premium/(Discount) is based on our assessment of the company’s NTM trading multiple after considering its key growth drivers, economic moat, stock's historical trading multiples versus peer average/median, and investment risks.

Stock Recommendation:  The stock of CHMA is trading below its average 52-weeks’ levels of $-$. The stock of CHMA gave a positive return of ~30.49% in the past one month and a positive return of ~28.80% in the past one week. On a technical analysis front, the stock of CHMA has a support level of ~$3.67 and a resistance level of ~$4.45. We have valued the stock using an EV/Sales multiple-based illustrative relative valuation and have arrived at a correction of low single-digit (in % terms). We believe that the company can trade at a slight premium to its peer average EV/Sales (NTM Trading multiple), considering the generation of revenue, and comfortable cash position. For the purpose, we have taken peers such as Strongbridge Biopharma plc (NASDAQ: SBBP), Eagle Pharmaceuticals Inc (NASDAQ: EGRX), Adamis Pharmaceuticals Corp (NASDAQ: ADMP), to name a few. Considering the current high trading levels, recent rally in the stock price, net loss during the period and the key risks associated with the business, we suggest investors to book profits and give a ‘Sell’ rating on the stock at the closing market price of $3.98, up by 40.14% as on May 05, 2021. The stock saw a surge in price on 05 May 2021 after the announcement of a definitive agreement with Amryt to acquire the company.

Comparative Price Chart (Source: Refinitiv, Thomson Reuters)

Note: Investment decision should be made depending on the investors’ appetite on upside potential, risks, holding duration, and any previous holdings. Investors can consider exiting from the stock if the Target Price mentioned as per the Valuation has been achieved and subject to the factors discussed above.

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