Mid-caps stocks, like Amicus Therapeutics Inc (NASDAQ:FOLD) with a market capitalization of US$2.88b, aren’t the focus of most investors who prefer to direct their investments towards either large-cap or small-cap stocks. Despite this, commonly overlooked mid-caps have historically produced better risk-adjusted returns than their small and large-cap counterparts. FOLD’s financial liquidity and debt position will be analysed in this article, to get an idea of whether the company can fund opportunities for strategic growth and maintain strength through economic downturns. Note that this information is centred entirely on financial health and is a top-level understanding, so I encourage you to look further into FOLD here.
How much cash does FOLD generate through its operations?
FOLD’s debt levels surged from US$159.17m to US$169.44m over the last 12 months , which is made up of current and long term debt. With this increase in debt, FOLD’s cash and short-term investments stands at US$538.95m for investing into the business. Moving onto cash from operations, its operating cash flow is not yet significant enough to calculate a meaningful cash-to-debt ratio, indicating that operational efficiency is something we’d need to take a look at. For this article’s sake, I won’t be looking at this today, but you can assess some of FOLD’s operating efficiency ratios such as ROA here.
Can FOLD pay its short-term liabilities?
With current liabilities at US$52.96m, the company has maintained a safe level of current assets to meet its obligations, with the current ratio last standing at 10.88x. Though, anything about 3x may be excessive, since FOLD may be leaving too much capital in low-earning investments.
Does FOLD face the risk of succumbing to its debt-load?
With a debt-to-equity ratio of 30.16%, FOLD’s debt level may be seen as prudent. FOLD is not taking on too much debt commitment, which can be restrictive and risky for equity-holders. Risk around debt is very low for FOLD, and the company also has the ability and headroom to increase debt if needed going forward.
FOLD’s low debt is also met with low coverage. This indicates room for improvement as its cash flow covers less than a quarter of its borrowings, which means its operating efficiency could be better. However, the company exhibits proper management of current assets and upcoming liabilities. Keep in mind I haven’t considered other factors such as how FOLD has been performing in the past. You should continue to research Amicus Therapeutics to get a more holistic view of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for FOLD’s future growth? Take a look at our free research report of analyst consensus for FOLD’s outlook.
- Valuation: What is FOLD worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether FOLD is currently mispriced by the market.
- Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at email@example.com.