- By GF Value
The stock of Celldex Therapeutics (NAS:CLDX, 30-year Financials) appears to be significantly overvalued, according to GuruFocus Value calculation. GuruFocus Value is GuruFocus' estimate of the fair value at which the stock should be traded. It is calculated based on the historical multiples that the stock has traded at, the past business growth and analyst estimates of future business performance. If the price of a stock is significantly above the GF Value Line, it is overvalued and its future return is likely to be poor. On the other hand, if it is significantly below the GF Value Line, its future return will likely be higher. At its current price of $19.73 per share and the market cap of $780.7 million, Celldex Therapeutics stock is believed to be significantly overvalued. GF Value for Celldex Therapeutics is shown in the chart below.
Because Celldex Therapeutics is significantly overvalued, the long-term return of its stock is likely to be much lower than its future business growth.
Link: These companies may deliever higher future returns at reduced risk.
It is always important to check the financial strength of a company before buying its stock. Investing in companies with poor financial strength have a higher risk of permanent loss. Looking at the cash-to-debt ratio and interest coverage is a great way to understand the financial strength of a company. Celldex Therapeutics has a cash-to-debt ratio of 52.41, which is better than 68% of the companies in Biotechnology industry. The overall financial strength of Celldex Therapeutics is 6 out of 10, which indicates that the financial strength of Celldex Therapeutics is fair. This is the debt and cash of Celldex Therapeutics over the past years:
It is less risky to invest in profitable companies, especially those with consistent profitability over long term. A company with high profit margins is usually a safer investment than those with low profit margins. Celldex Therapeutics has been profitable 0 over the past 10 years. Over the past twelve months, the company had a revenue of $4.5 million and loss of $2.23 a share. Its operating margin is -1150.28%, which ranks worse than 75% of the companies in Biotechnology industry. Overall, the profitability of Celldex Therapeutics is ranked 1 out of 10, which indicates poor profitability. This is the revenue and net income of Celldex Therapeutics over the past years: