Stocks’ Details

Tonix Pharmaceuticals Holding Corp

June Quarter Highlights: Tonix Pharmaceuticals Holding Corp (NASDAQ: TNXP) is a clinical-stage biopharmaceutical company focused on discovering and developing pharmaceutical products to treat serious psychiatric, pain and addiction conditions. During the June 2020 quarter, the company spent $10.6 million in research and development, up $7 million on pcp, due to the acquisition of technologies of Trigemina, Inc., timing of development milestones related to the ongoing Phase 3 trial of TNX-102 SL in fibromyalgia and increased activities relating to COVID-19 vaccine work. During the quarter, the company made progress for its lead immunology and central nervous system product candidates. For the quarter, the company incurred a loss of $14.2 million, compared to a net loss of $5.8 million in pcp. At the end of June quarter, the company had cash and cash equivalents of $55.0 million.

Q2FY20 Results (Source: Company Reports)

Clearance of IND for TNX-102 SL: On 6 August 2020, the company announced that the US FDA has given its clearance for the Investigational New Drug (IND) application for the initiation of a Phase 2 proof-of-concept study using TNX-102 SL for treatment of alcohol use disorder. 

Upcoming Events: The company has scheduled to hold its Extraordinary Shareholders Meeting on 28 August 2020. In September 2020, the company expects to release interim analysis results for Phase 3 RELIEF Trial of TNX-102 SL for the Management of Fibromyalgia. In the fourth quarter of 2020, the company expects to receive preclinical data for TNX-1800, a Vaccine candidate to protect against COVID-19.

Key Risks: The company is exposed to the risks related to failure in obtaining FDA clearances or approvals and non-compliance with FDA regulations; delays and uncertainties caused by the global pandemic; and risks related to the timing and progress of clinical development of its product candidates.

Stock Recommendation: The stock has provided a return of 23.64% in the last three months but has corrected by 41.17% in the last one month. On the technical analysis front, the stock has a support level of ~$0.84 and a resistance level of $1.45. The company has a current ratio of 12.55x, higher than the industry median of 7.81x. On the face of the upcoming results for Phase 3 RELIEF Trial of TNX-102 SL, and upcoming preclinical data for TNX-1800, we suggest investors to wait for further updates and have a watch stance on the stock at the closing price of $0.8531, up 2.13% on 25 August 2020.

Bigcommerce Holdings, Inc.

Availability of Checkout feature on Instagram: Bigcommerce Holdings, Inc. (NASDAQ: BIGC) operates a leading open SaaS ecommerce platform that provides merchants sophisticated enterprise-grade functionality, customization, and performance. On 7 August 2020, the company announced the closing of its initial public offering (IPO) of 10,372,500 shares of its Series 1 common stock. The company’s main purpose behind the offering was to increase its financial flexibility, create a public market for its Series 1 common stock, and facilitate future access to the public equity markets. The company’s shares began trading on NASDAQ on 5 August 2020.

Announces Checkout on Instagram Feature for US Merchants: On 25 August 2020, the company announced that the availability of Checkout feature on Instagram which allows customers to buy new items while scrolling through their feed, all without missing a beat. This feature is currently available for US merchants only, however, the company has long term plans to make checkout available to businesses outside of the U.S.

March 2020 Quarter Update: For the March 2020 quarter, the company reported revenue of $33.17 million and gross profit of $25.69 million. The company’s total operating expenses stood at $33.14 million. During the quarter, the company incurred a net loss of $4.02 million. At the end of the March quarter, the company had cash and cash equivalents of $12.793 million. The company intends to announce its Q2 FY20 results on 9 September 2020.

March 2020 Quarter Results (Source: Company Reports)

Key Risks: The company faces intense competition, especially from well-established companies offering solutions and related applications. This could harm the company’s ability to increase sales, maintain or increase renewals, and maintain its prices. The revenue growth of the company depends on a number of factors, including the ability to attract new customers and retain and increase sales to existing customers; ability to maintain and expand relationships with partner; ability to increase the number of partners; and to develop its existing platform and introduce new functionality to the platform.

Stock Recommendation: Looking ahead, the company intends to invest in sales and marketing efforts, research and development, and expansion into new geographies. On a YTD basis, the stock has provided a return of 44.03%. On 25 August 2020, the stock increased by 36.87%, possibly due to the release of Checkout feature on Instagram. The company has a current ratio of 1.77x, higher than the industry median of 1.64x. Considering the company’s limited trading history, key risks and decent price movement since its listing, we suggest investors to wait for better entry levels and have a watch stance on the stock at the closing price of $104.09, up by 36.87% on 25 August 2020.

MakeMyTrip Limited

June 2020 Quarter Update: MakeMyTrip Limited (NASDAQ: MMYT) is a leading travel company that allows customers to research, plan and book a wide range of travel services and products. During the June 2020 quarter, the company reported revenue of $6.4 million, down by 95.5% on pcp, due to the impact of the COVID-19 pandemic and lower travel demand due to travel restrictions and nationwide lockdown orders implemented in India in March 2020. For the quarter, the company reported a diluted loss per share was $0.32. At the end of the June quarter, the company had cash and cash equivalents and term deposit of $173.8 million. In order to increase its balance sheet flexibility, the company has secured credit and guarantee facilities of approximately $100 million. The company expects to release its Q2 2021 results on 29^th September 2020.

March 2020 Quarter Results (Source: Company Reports)

COVID-19 Response: In response to COVID-19 pandemic and significant erosion of travel demand, the company has shifted its focus on cost reductions and minimizing operating losses. Further, it has implemented various cost saving measures including compensation cuts, optimizing its IT infrastructure costs and its office costs and various other general and administrative expenses, in addition to a significant reduction in other variable costs.

Key Risks: The company is exposed to the risks related to COVID-19 pandemic as it can adversely impact the company’s business and financial condition. Further, the company is also exposed to the risks of slow-down of economic growth and the global economic downturn, and general declines or disruptions in the travel industry.

Valuation Methodology: P/BV Multiple Based Relative Valuation (Illustrative)

P/BV Multiple Based Relative Valuation (Source: Refinitiv, Thomson Reuters)

Note: All the forecasted figures are taken from Thomson Reuters, NTM: Next Twelve Months

Stock Recommendation: With the easing of lockdown restrictions, the company seems to be well-positioned competitively, operationally, and financially to recover from the covid-19 impact. On a YTD basis, the stock has corrected by 30.96% and is currently inclined towards its 52 weeks low of $10.00. On the technical analysis front, the stock has a support level of ~$14.34 and a resistance level of ~$19.81. For FY20, the company’s debt to equity multiple stood at 0.03x, lower than the industry median of 0.12x. We have valued the stock using the price to book value multiple based illustrative relative valuation method and have arrived at a target price of low double-digit upside (in % terms). Considering the easing of the lockdown restrictions, the company’s balance sheet flexibility, recently introduced cost-saving measures, and current trading levels, we give a “Speculative Buy” recommendation on the stock at the closing price of $15.81, up by 7.7% on 25 August 2020.

Comparative Price Chart (Source: Refinitiv, Thomson Reuters)

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