Denali Therapeutics (NasdaqGS:DNLI) - Share price, News & Analysis

Q: What is the Fair Price of DNLI when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

DNLI ($29.3) is trading below our estimate of [[fair value]] ($68.77)

DNLI fundamental analysis
Snowflake Score
Valuation	2/6
Future Growth	2/6
Past Performance	0/6
Financial Health	6/6
Dividends	0/6

DNLI Stock Overview

Denali Therapeutics Inc., a biopharmaceutical company, discovers and develops therapeutic candidates for neurodegenerative diseases in the United States.

Rewards

Trading at 57.4% below our estimate of its fair value

Revenue is forecast to grow 52.46% per year

Risk Analysis

Currently unprofitable and not forecast to become profitable over the next 3 years

Denali Therapeutics Competitors

Cytokinetics

NasdaqGS:CYTK

US$4.2b

Natera

NasdaqGS:NTRA

US$3.6b

Amicus Therapeutics

NasdaqGM:FOLD

US$3.0b

Therapeutics

NasdaqGS:PTCT

US$2.8b

Price History & Performance

Summary of all time highs, changes and price drops for Denali Therapeutics
Historical stock prices
Current Share Price	US$29.30
52 Week High	US$79.70
52 Week Low	US$20.24
Beta	1.89
1 Month Change	16.13%
3 Month Change	-9.57%
1 Year Change	-61.89%
3 Year Change	42.86%
5 Year Change	n/a
Change since IPO	36.60%

Recent News & Updates

Jun 08

We're Not Very Worried About Denali Therapeutics' (NASDAQ:DNLI) Cash Burn Rate

Even when a business is losing money, it's possible for shareholders to make money if they buy a good business at the...

Shareholder Returns

	DNLI	US Biotechs	US Market
7D	9.5%	10.3%	6.3%
1Y	-61.9%	-24.5%	-18.8%

Return vs Industry: DNLI underperformed the US Biotechs industry which returned -24.5% over the past year.

Return vs Market: DNLI underperformed the US Market which returned -18.8% over the past year.

Price Volatility

Is DNLI's price volatile compared to industry and market?
DNLI volatility
DNLI Average Weekly Movement	11.2%
Biotechs Industry Average Movement	13.2%
Market Average Movement	8.1%
10% most volatile stocks in US Market	16.7%
10% least volatile stocks in US Market	3.2%

Stable Share Price: DNLI is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 11% a week.

Volatility Over Time: DNLI's weekly volatility (11%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
2013	380	Ryan Watts	https://www.denalitherapeutics.com

Denali Therapeutics Inc., a biopharmaceutical company, discovers and develops therapeutic candidates for neurodegenerative diseases in the United States. It offers leucine-rich repeat kinase 2 (LRRK2) inhibitor product candidate, including BIIB122/DNL151, a small molecule inhibitor, which is in phase I and phase Ib clinical trials for the treatment of Parkinson’s disease. The company also develops DNL310 that is in Phase I/II clinical trials for the treatment of hunter syndrome; DNL343, which is in phase 1 clinical trial the treatment of amyotrophic lateral sclerosis (ALS); AR443820/DNL788 completed a phase I clinical trial for the treatment of ALS, multiple sclerosis (MS), and Alzheimer’s disease; and SAR443122/DNL758, which is in phase II clinical trial for the treatment of cutaneous lupus erythematosus.

Denali Therapeutics Fundamentals Summary

How do Denali Therapeutics's earnings and revenue compare to its market cap?
DNLI fundamental statistics
Market Cap	US$3.60b
Earnings (TTM)	-US$285.76m
Revenue (TTM)	US$82.88m

43.5x

P/S Ratio

-12.6x

P/E Ratio

Is DNLI overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
DNLI income statement (TTM)
Revenue	US$82.88m
Cost of Revenue	US$291.24m
Gross Profit	-US$208.36m
Other Expenses	US$77.40m
Earnings	-US$285.76m

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	-2.32
Gross Margin	-251.41%
Net Profit Margin	-344.79%
Debt/Equity Ratio	0%

How did DNLI perform over the long term?

See historical performance and comparison

We’ve recently updated our valuation analysis.

Valuation

Is DNLI undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

2/6

Valuation Score 2/6

Price-To-Sales vs Peers
Price-To-Sales vs Industry
Price-To-Sales vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
PEG Ratio

Key Valuation Metric

Which metric is best to use when looking at relative valuation for DNLI?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for DNLI. This is calculated by dividing DNLI's market cap by their current preferred multiple.
What is DNLI's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	US$3.60b

DNLI key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	29.6x
Enterprise Value/EBITDA	-8.7x
PEG Ratio	n/a

Price to Sales Ratio vs Peers

How does DNLI's PS Ratio compare to its peers?

DNLI PS Ratio vs Peers

The above table shows the PS ratio for DNLI vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PS	Estimated Growth	Market Cap
Peer Average	20.5x
CYTK Cytokinetics	62.3x	66.3%	US$4.2b
NTRA Natera	5.4x	18.3%	US$3.6b
FOLD Amicus Therapeutics	9.3x	25.0%	US$3.0b
PTCT Therapeutics	5x	10.6%	US$2.8b
DNLI Denali Therapeutics	43.5x	52.5%	US$3.6b

Forward PS

Price-To-Sales vs Peers: DNLI is expensive based on its Price-To-Sales Ratio (43.5x) compared to the peer average (20.5x).

Price to Earnings Ratio vs Industry

How does DNLI's PE Ratio compare vs other companies in the US Biotechs Industry?

Price-To-Sales vs Industry: DNLI is expensive based on its Price-To-Sales Ratio (43.5x) compared to the US Biotechs industry average (13.7x)

Price to Sales Ratio vs Fair Ratio

What is DNLI's PS Ratio compared to its Fair PS Ratio? This is the expected PS Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

DNLI PS Ratio vs Fair Ratio.
Fair Ratio
Current PS Ratio	43.5x
Fair PS Ratio	0.7x

Price-To-Sales vs Fair Ratio: DNLI is expensive based on its Price-To-Sales Ratio (43.5x) compared to the estimated Fair Price-To-Sales Ratio (0.7x).

Share Price vs Fair Value

What is the Fair Price of DNLI when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: DNLI ($29.3) is trading below our estimate of fair value ($68.77)

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

Price to Earnings Growth Ratio

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

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Future Growth

How is Denali Therapeutics forecast to perform in the next 1 to 3 years based on estimates from 14 analysts?

Future Growth Score

2/6

Future Growth Score 2/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

29.3%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: DNLI is forecast to remain unprofitable over the next 3 years.

Earnings vs Market: DNLI is forecast to remain unprofitable over the next 3 years.

High Growth Earnings: DNLI is forecast to remain unprofitable over the next 3 years.

Revenue vs Market: DNLI's revenue (52.5% per year) is forecast to grow faster than the US market (8.3% per year).

High Growth Revenue: DNLI's revenue (52.5% per year) is forecast to grow faster than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: DNLI is forecast to be unprofitable in 3 years.

Discover growth companies

Past Performance

How has Denali Therapeutics performed over the past 5 years?

Past Performance Score

0/6

Past Performance Score 0/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

-5.6%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: DNLI is currently unprofitable.

Growing Profit Margin: DNLI is currently unprofitable.

Past Earnings Growth Analysis

Earnings Trend: DNLI is unprofitable, and losses have increased over the past 5 years at a rate of 5.6% per year.

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

Earnings vs Industry: DNLI is unprofitable, making it difficult to compare its past year earnings growth to the Biotechs industry (96.9%).

Return on Equity

High ROE: DNLI has a negative Return on Equity (-31.13%), as it is currently unprofitable.

Discover strong past performing companies

Financial Health

How is Denali Therapeutics's financial position?

Financial Health Score

6/6

Financial Health Score 6/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Stable Cash Runway
Forecast Cash Runway

Financial Position Analysis

Short Term Liabilities: DNLI's short term assets ($988.4M) exceed its short term liabilities ($341.2M).

Long Term Liabilities: DNLI's short term assets ($988.4M) exceed its long term liabilities ($61.7M).

Debt to Equity History and Analysis

Debt Level: DNLI is debt free.

Reducing Debt: DNLI has not had any debt for past 5 years.

Balance Sheet

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: DNLI has sufficient cash runway for more than 3 years based on its current free cash flow.

Forecast Cash Runway: DNLI has sufficient cash runway for more than 3 years if free cash flow continues to grow at historical rates of 24.2% each year

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Dividend

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

Dividend Score

0/6

Dividend Score 0/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage

Dividend Yield vs Market

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

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

Stability and Growth of Payments

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

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

Earnings Payout to Shareholders

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

Cash Payout to Shareholders

Cash Flow Coverage: Unable to calculate sustainability of dividends as DNLI has not reported any payouts.

Discover strong dividend paying companies

Management

How experienced are the management team and are they aligned to shareholders interests?

3.8yrs

Average management tenure

CEO

Ryan Watts (45 yo)

6.83yrs

Tenure

US$12,673,479

Compensation

Dr. Ryan J. Watts, Ph.D. is the Co-Founder of Denali Therapeutics Inc. and has been its President and Chief Executive Officer since August 2015. Dr. Watts has been a Director of Denali Therapeutics Inc. si...

CEO Compensation Analysis

Compensation vs Market: Ryan's total compensation ($USD12.67M) is above average for companies of similar size in the US market ($USD6.87M).

Compensation vs Earnings: Ryan's compensation has increased whilst the company is unprofitable.

Leadership Team

Experienced Management: DNLI's management team is considered experienced (3.8 years average tenure).

Board Members

Experienced Board: DNLI's board of directors are considered experienced (7.1 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.

Recent Insider Transactions

Ownership Breakdown

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

Data	Last Updated (UTC time)
Company Analysis	2022/06/28 00:00
End of Day Share Price	2022/06/28 00:00
Earnings	2022/03/31
Annual Earnings	2021/12/31