TSX:TH

Stock Analysis Report

Executive Summary

Theratechnologies Inc., a specialty pharmaceutical company, addresses unmet medical needs to promote healthy living and improve quality of life among HIV patients.

Rewards

Trading at 76.1% below its fair value

Earnings are forecast to grow 55.88% per year

Risk Analysis

Highly volatile share price over past 3 months



Snowflake Analysis

Exceptional growth potential with mediocre balance sheet.

Share Price & News

How has Theratechnologies's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: TH's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

6.9%

TH

44.2%

CA Biotechs

0.4%

CA Market


1 Year Return

-52.3%

TH

50.7%

CA Biotechs

10.6%

CA Market

Return vs Industry: TH underperformed the Canadian Biotechs industry which returned 50.7% over the past year.

Return vs Market: TH underperformed the Canadian Market which returned 10.6% over the past year.


Shareholder returns

THIndustryMarket
7 Day6.9%44.2%0.4%
30 Day-20.9%66.0%0.01%
90 Day-29.5%44.5%0.7%
1 Year-52.3%-52.3%50.7%50.7%14.3%10.6%
3 Year44.2%44.2%55.3%55.3%15.9%5.4%
5 Year878.0%878.0%108.6%108.6%35.2%15.2%

Price Volatility Vs. Market

How volatile is Theratechnologies's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Theratechnologies undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: TH (CA$4.01) is trading below our estimate of fair value (CA$16.79)

Significantly Below Fair Value: TH is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: TH is unprofitable, so we can't compare its PE Ratio to the Biotechs industry average.

PE vs Market: TH is unprofitable, so we can't compare its PE Ratio to the Canadian market.


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate TH's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: TH is overvalued based on its PB Ratio (7.8x) compared to the CA Biotechs industry average (3.2x).


Next Steps

Future Growth

How is Theratechnologies forecast to perform in the next 1 to 3 years based on estimates from 5 analysts?

55.9%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: TH is forecast to become profitable over the next 3 years, which is considered faster growth than the savings rate (1.4%).

Earnings vs Market: TH is forecast to become profitable over the next 3 years, which is considered above average market growth.

High Growth Earnings: TH's is expected to become profitable in the next 3 years.

Revenue vs Market: TH's revenue (25.2% per year) is forecast to grow faster than the Canadian market (4.9% per year).

High Growth Revenue: TH's revenue (25.2% per year) is forecast to grow faster than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: TH's Return on Equity is forecast to be high in 3 years time (27.9%)


Next Steps

Past Performance

How has Theratechnologies performed over the past 5 years?

-11.8%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: TH is currently unprofitable.

Growing Profit Margin: TH is currently unprofitable.


Past Earnings Growth Analysis

Earnings Trend: TH is unprofitable, and losses have increased over the past 5 years at a rate of -11.8% per year.

Accelerating Growth: Unable to compare TH's earnings growth over the past year to its 5-year average as it is currently unprofitable

Earnings vs Industry: TH is unprofitable, making it difficult to compare its past year earnings growth to the Biotechs industry (103.3%).


Return on Equity

High ROE: TH has a negative Return on Equity (-22.8%), as it is currently unprofitable.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Theratechnologies's financial position?


Financial Position Analysis

Short Term Liabilities: TH's short term assets ($68.8M) exceed its short term liabilities ($27.4M).

Long Term Liabilities: TH's short term assets ($68.8M) exceed its long term liabilities ($50.6M).


Debt to Equity History and Analysis

Debt Level: TH's debt to equity ratio (167.7%) is considered high.

Reducing Debt: Insufficient data to determine if TH's debt to equity ratio has reduced over the past 5 years.


Balance Sheet

Inventory Level: TH has a low level of unsold assets or inventory.

Debt Coverage by Assets: TH's debt is covered by short term assets (assets are 1.4x debt).


Cash Runway Analysis

For companies that have on average been loss making in the past we assess whether they have at least 1 year of cash runway.

Stable Cash Runway: TH has sufficient cash runway for more than a year based on its current free cash flow.

Forecast Cash Runway: Insufficient data to determine if TH has enough cash runway if its free cash flow continues to grow or shrink based on historical rates.


Next Steps

Dividend

What is Theratechnologies's current dividend yield, its reliability and sustainability?


Dividend Yield vs Market

companyn/amarketbottom25%2.0%markettop25%5.6%industryaverage2.0%forecastin3Yearsn/a

Current dividend yield vs market & industry

Notable Dividend: Unable to evaluate TH's dividend yield against the bottom 25% of dividend payers, as the company has not reported any payouts.

High Dividend: Unable to evaluate TH's dividend yield against the top 25% of dividend payers, as the company has not reported any payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if TH's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if TH's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of TH's dividend in 3 years as they are not forecast to pay a notable one for the Canadian market.


Next Steps

Management

What is the CEO of Theratechnologies's salary, the management and board of directors tenure and is there insider trading?

3.4yrs

Average management tenure


CEO

Luc Tanguay (61yo)

7.2yrs

Tenure

US$1,169,180

Compensation

Mr. Luc Tanguay, M.Sc., C.F.A. has been the Chief Executive Officer and President of Theratechnologies Inc. since October 11, 2012. Mr. Tanguay has been active in the biotechnology industry for over 20 yea ...


CEO Compensation Analysis

Compensation vs Market: Luc's total compensation ($USD886.76K) is about average for companies of similar size in the Canadian market ($USD682.76K).

Compensation vs Earnings: Luc's compensation has been consistent with company performance over the past year.


Management Age and Tenure

3.4yrs

Average Tenure

52.5yo

Average Age

Experienced Management: TH's management team is considered experienced (3.4 years average tenure).


Board Age and Tenure

13.8yrs

Average Tenure

66yo

Average Age

Experienced Board: TH's board of directors are seasoned and experienced ( 13.8 years average tenure).


Insider Trading

Insider Buying: TH insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

BuyUS$15,07915 Nov 19
Gary Littlejohn
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares3,190
Max PriceUS$4.74
BuyUS$4,85015 Oct 19
Philippe Dubuc
EntityIndividual
Role
Chief Financial Officer
Senior VP & CFO
Shares1,000
Max PriceUS$4.85
BuyUS$19,90330 Apr 19
Philippe Dubuc
EntityIndividual
Role
Chief Financial Officer
Senior VP & CFO
Shares3,000
Max PriceUS$6.66

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Management Team

  • Luc Tanguay (61yo)

    President

    • Tenure: 7.2yrs
    • Compensation: US$1.17m
  • Jocelyn Lafond (51yo)

    VP of Legal Affairs & Corporate Secretary

    • Tenure: 0yrs
    • Compensation: US$444.16k
  • Christian Marsolais (56yo)

    Senior VP & Chief Medical Officer

    • Tenure: 3.4yrs
    • Compensation: US$582.29k
  • Philippe Dubuc (52yo)

    Senior VP & CFO

    • Tenure: 3.8yrs
    • Compensation: US$596.33k
  • Denis Boucher (53yo)

    Vice President of Communications & Corporate Affairs

    • Tenure: 1.9yrs
    • Compensation: US$457.30k
  • Jovan Antunovic (49yo)

    Senior VP & Chief Commercial Officer

    • Tenure: 1yrs

Board Members

  • Roger Guillemin

    Member of the Scientific Advisory Board

    • Tenure: 0yrs
  • Luc Tanguay (61yo)

    President

    • Tenure: 7.2yrs
    • Compensation: US$1.17m
  • Gary Littlejohn (64yo)

    Independent Director

    • Tenure: 1.2yrs
    • Compensation: US$8.00k
  • George Merriam

    Member of the Scientific Advisory Board

    • Tenure: 0yrs
  • David Clemmons

    Member of the Scientific Advisory Board

    • Tenure: 0yrs
  • Paul Pommier (77yo)

    Independent Director

    • Tenure: 22.9yrs
    • Compensation: US$109.67k
  • Gérald Lacoste (75yo)

    Independent Director

    • Tenure: 13.8yrs
    • Compensation: US$107.50k
  • Graham Svoronos (66yo)

    Chair of the Board

    • Tenure: 6.6yrs
    • Compensation: US$208.00k
  • Steven Grinspoon

    Member of the Scientific Advisory Board

    • Tenure: 0yrs
  • Peter Reiss

    Member of the Scientific Advisory Board

    • Tenure: 0yrs

Company Information

Theratechnologies Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Theratechnologies Inc.
  • Ticker: TH
  • Exchange: TSX
  • Founded: 1993
  • Industry: Biotechnology
  • Sector: Pharmaceuticals & Biotech
  • Market Cap: CA$308.583m
  • Shares outstanding: 76.95m
  • Website: https://www.theratech.com

Number of Employees


Location

  • Theratechnologies Inc.
  • 2015 Peel Street
  • 5th Floor
  • Montreal
  • Quebec
  • H3A 1T8
  • Canada

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
THTSX (The Toronto Stock Exchange)YesCommon SharesCACADDec 1993
TQ8DB (Deutsche Boerse AG)YesCommon SharesDEEURDec 1993
THTXNasdaqCM (Nasdaq Capital Market)YesCommon SharesUSUSDDec 1993

Biography

Theratechnologies Inc., a specialty pharmaceutical company, addresses unmet medical needs to promote healthy living and improve quality of life among HIV patients. It offers EGRIFTA, for the reduction of e ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/12/12 23:48
End of Day Share Price2019/12/12 00:00
Earnings2019/08/31
Annual Earnings2018/11/30


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.