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Curis, Inc.
CRIS Details
Curis, Inc. (NASDAQ: CRIS) is a biotechnology company that focuses on developing cancer therapeutics. CRIS key commercial offering is Erivedge, which is used to treat advanced basal cell carcinoma and is commercialized by Genentech. It also holds an exclusive license to oral small molecule immune checkpoint antagonists, principally CA-4948, an IRAK4 kinase inhibitor for treating non-Hodgkin lymphoma (NHL) patients in collaboration with Aurigene. Furthermore, CRIS and ImmuNext partnered on the development of CI-8993, a monoclonal anti-VISTA antibody.
Q2FY21 Results: The company reported a YoY decline of 3.14% in total revenues to USD 2.29 million in Q2FY21 (ended June 30, 2021) compared to USD 2.36 million in Q2FY20, attributable to a decline in royalty revenue from Genentech and Roche's sales of Erivedge. Net loss for Q2FY21 increased to USD 10.84 million from USD 6.71 million in Q2FY20. As of June 30, 2021, the company had cash & cash equivalents (including short-term investments) of USD 152.57 million and no outstanding debt.
Key Risks: CRIS faces significant competition from sonidegib (Odomzo) of Sun Pharmaceutical Industries Ltd. for Erivedge. Should this competition further intensify, it could adversely impact its royalty revenues and overall performance. Furthermore, the outcomes of preclinical studies and early-stage clinical trials are not necessarily indicative of the results of later-stage clinical trials. These are also subject to change when more patient data is tested and more analysis is done. Therefore, variations in preliminary and final published data could adversely impact the financials of the company.
Outlook: In H2FY21, CRIS plans to commence dosing in the combination stage of the Phase 1/2 study of CA-4948 plus azacitidine and CA-4948 with venetoclax. By FY21 end, CRIS expects to report additional clinical data from CA-4948's Phase 1/2 monotherapy study in AML/MDS patients with spliceosome mutations resulting in aberrant IRAK4-L splicing along with preliminary safety data from the current Phase 1 monotherapy study of CI-8993 for treating R/R solid tumors. It also forecasts to present preliminary data from the ongoing Phase 1/2 combo study of CA-4948 with ibrutinib in patients with B cell cancers at a medical symposium in H1FY22.
Valuation Methodology: EV/Sales Multiple Based Relative Valuation
(Analysis by Kalkine Group)
CRIS Daily Technical Chart (Source: REFINITIV)
Stock Recommendation: CRIS's stock price increased 6.79% in the past three months and is currently leaning towards the lower band of its 52-week range of USD 1.06 to USD 17.40. The stock is currently trading between its 50 and 200 DMA levels, and its RSI Index is at 48.55. We have valued the stock using the EV/Sales-based relative valuation methodology and arrived at a target price of USD 9.01. Considering the slight uptick in the stock price, decent growth potential, current valuation, and associated risks, we recommend a "Hold" rating on the stock at the current price of USD 8.02, up 2.17% as of October 05, 2021, 1:52 PM ET.
* The reference data in this report has been partly sourced from REFINITIV.
* All forecasted figures and industry information have been taken from REFINITIV.
Mastercraft Boat Holdings, Inc.
MCFT Details
MasterCraft Boat Holdings, Inc. (NASDAQ: MCFT) is a designer, manufacturer, and distributor of performance sport boats (PSBs), luxury day boats, and outboard boats. Its operating segments are 1) MasterCraft, which manufactures performance sport boats used for water skiing and leisure boating and luxury recreational boats under the MasterCraft and Aviara brands, 2) NauticStar, which produces saltwater fishing boats, deck boats, and bay boats built for various activities, including recreational and competitive sport fishing in freshwater lakes or saltwater, and 3) Crest segment, which builds pontoon boats used for leisure purposes. As of October 05, 2021, the company's market capitalization stood at USD 500.68 million.
FY21 Results: The company reported a YoY surge of 44.82% in total revenues to USD 525.81 million in FY21 (ended June 30, 2021) compared to USD 363.07 million in FY20. The MasterCraft, which accounted for 69.09% of the total revenue in FY21, reported YoY growth of 47.40%, whereas the Crest revenues improved by 66.46% YoY. MCFT reported a net income of USD 56.17 million in FY21 vs. a net loss of USD 24.05 million in FY20. As of June 30, 2021, the company had cash & cash equivalents of USD 39.25 million and total debt of USD 93.14 million.
Key Risks: MCFT operates in the leisure products industry, which suffered a massive hit due to the outbreak of the COVID-19 pandemic. Should this declining trend continue, it will impact consumers' discretionary spending on non-essential items, harming the company's financials. In addition, MCFT conducts its business in many currencies other than USD, making it vulnerable to exchange rate fluctuations. Therefore, any unfavorable movement in the exchange rates could harm its operations.
Outlook: In Q1FY22, the company forecasts its total revenue to grow by ~30%, with an adjusted EBITDA margin of around 11.5%. It also expects a low double-digit decline in EPS on a YoY basis. For FY22, MCFT anticipates a YoY growth of high teens (in % terms) in total revenue and EPS. It also stated that its FY22 capital expenditures would range between USD 25 – 30 million.
Valuation Methodology: EV/EBITDA Multiple Based Relative Valuation
(Analysis by Kalkine Group)
MCFT Daily Technical Chart (Source: REFINITIV)
Stock Recommendation: MCFT's stock price increased 4.83% in the past three months and is currently at the mid-point of its 52-week range of USD 18.48 to USD 33.63. The stock is currently trading between its 50 and 200 DMA levels, and its RSI Index is at 55.33. We have valued the stock using the EV/EBITDA-based relative valuation methodology and arrived at a target price of USD 30.31. Considering the slight uptick in the stock price, a surge in top and bottom-line, current valuation, and associated risks, we recommend a "Hold" rating on the stock at the closing price of USD 26.25, down 0.27% as of October 05, 2021.
* The reference data in this report has been partly sourced from REFINITIV.
* All forecasted figures and industry information have been taken from REFINITIV.
Kalkine Equities LLC provides general information about companies and their securities. The information contained in the reports, including any recommendations regarding the value of or transactions in any securities, does not take into account any of your investment objectives, financial situation or needs. Kalkine Equities LLC is not registered as an investment adviser in the U.S. with either the federal or state government. Before you make a decision about whether to invest in any securities, you should take into account your own objectives, financial situation and needs and seek independent financial advice. All information in our reports represents our views as at the date of publication and may change without notice.
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Past performance is not a reliable indicator of future performance.
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