NasdaqGM:RETA

Stock Analysis Report

Executive Summary

Reata Pharmaceuticals, Inc., a clinical stage biopharmaceutical company, develops novel therapeutics for patients with serious or life-threatening diseases by targeting molecular pathways that regulate cellular metabolism and inflammation.

Rewards

Revenue is forecast to grow 53.13% per year

Risk Analysis

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

Shareholders have been diluted in the past year



Snowflake Analysis

Limited growth with imperfect balance sheet.


Similar Companies

Share Price & News

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


Latest Share Price and Events

Stable Share Price: RETA has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-2.2%

RETA

-0.5%

US Pharmaceuticals

-0.09%

US Market


1 Year Return

176.9%

RETA

15.2%

US Pharmaceuticals

23.9%

US Market

Return vs Industry: RETA exceeded the US Pharmaceuticals industry which returned 12.6% over the past year.

Return vs Market: RETA exceeded the US Market which returned 24.7% over the past year.


Shareholder returns

RETAIndustryMarket
7 Day-2.2%-0.5%-0.09%
30 Day-3.4%2.3%3.1%
90 Day5.5%15.0%10.4%
1 Year176.9%176.9%18.1%15.2%26.6%23.9%
3 Year741.1%741.1%42.8%32.6%50.9%41.2%
5 Yearn/a30.6%16.8%78.1%58.5%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

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


In this section, we usually try to help investors determine whether Reata Pharmaceuticals is trading at an attractive price based on the cash flow it is expected to produce in the future. But as Reata Pharmaceuticals has not provided consistent financial data, and the stock also has no analyst forecast or coverage, its intrinsic value cannot be reliably calculated by extrapolating past data or using analyst consensus cash flow predictions.

This is quite a rare situation as 89% of companies covered by Simply Wall St do have a valuation analysis.


Next Steps

Future Growth

How is Reata Pharmaceuticals forecast to perform in the next 1 to 3 years based on estimates from 6 analysts?

52.4%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

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

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

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

Revenue vs Market: RETA's revenue (53.1% per year) is forecast to grow faster than the US market (7.5% per year).

High Growth Revenue: RETA's revenue (53.1% per year) is forecast to grow faster than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: Insufficient data to determine if RETA's Return on Equity is forecast to be high in 3 years time


Next Steps

Past Performance

How has Reata Pharmaceuticals performed over the past 5 years?

-73.3%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: RETA is currently unprofitable.

Growing Profit Margin: RETA is currently unprofitable.


Past Earnings Growth Analysis

Earnings Trend: RETA is unprofitable, and losses have increased over the past 5 years at a rate of -73.3% per year.

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

Earnings vs Industry: RETA is unprofitable, making it difficult to compare its past year earnings growth to the Pharmaceuticals industry (36.8%).


Return on Equity

High ROE: RETA's liabilities exceed its assets, so it is difficult to calculate its Return on Equity.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Reata Pharmaceuticals's financial position?


Financial Position Analysis

Short Term Liabilities: RETA has negative shareholder equity, which is a more serious situation than short term assets not covering short term liabilities.

Long Term Liabilities: RETA has negative shareholder equity, which is a more serious situation than short term assets not covering long term liabilities.


Debt to Equity History and Analysis

Debt Level: RETA has negative shareholder equity, which is a more serious situation than a high debt level.

Reducing Debt: RETA's has negative shareholder equity, so we do not need to check if its debt has reduced over time.


Balance Sheet

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

Debt Coverage by Assets: RETA has negative shareholder equity (liabilities exceed assets) therefore debt is not covered by short term assets.


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: RETA has sufficient cash runway for more than a year based on its current free cash flow.

Forecast Cash Runway: RETA has sufficient cash runway for 1.3 years if free cash flow continues to reduce at historical rates of -43.2% each year.


Next Steps

Dividend

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


Dividend Yield vs Market

companyn/amarketbottom25%1.4%markettop25%3.7%industryaverage2.6%forecastin3Years0%

Current dividend yield vs market & industry

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

High Dividend: Unable to evaluate RETA'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 RETA's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if RETA'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 RETA's dividend in 3 years as they are not forecast to pay a notable one for the US market.


Next Steps

Management

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

1.2yrs

Average management tenure


CEO

J. Huff (65yo)

18yrs

Tenure

US$934,500

Compensation

Mr. J. Warren Huff has been the Chief Executive Officer and President of Reata Pharmaceuticals, Inc. (formerly, Reata Discovery Inc) since founding in 2002 and has been its Chairman since 2002. Mr. Huff is ...


CEO Compensation Analysis

Compensation vs Market: J.'s total compensation ($USD934.50K) is below average for companies of similar size in the US market ($USD6.46M).

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


Management Age and Tenure

1.2yrs

Average Tenure

49yo

Average Age

Experienced Management: RETA's management team is not considered experienced ( 1.2 years average tenure), which suggests a new team.


Board Age and Tenure

15.1yrs

Average Tenure

57yo

Average Age

Experienced Board: RETA's board of directors are seasoned and experienced ( 15.1 years average tenure).


Insider Trading

Insider Buying: RETA insiders have only sold shares in the past 3 months.


Recent Insider Transactions

SellUS$622,00920 Nov 19
Charles Gale
EntityIndividual
Shares3,000
Max PriceUS$210.00
BuyUS$7,359,89418 Nov 19
CPMG, Inc.
EntityCompany
Shares40,218
Max PriceUS$183.00
SellUS$5,456,11530 Sep 19
J. Huff
EntityIndividual
Role
Chief Executive Officer
Chairman
Shares82,500
Max PriceUS$86.61
SellUS$586,92007 Mar 19
James Bass
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares5,852
Max PriceUS$100.29

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 11.7%.


Management Team

  • J. Huff (65yo)

    Chairman

    • Tenure: 18yrs
    • Compensation: US$934.50k
  • Mike Wortley (71yo)

    Executive VP & Chief Legal Officer

    • Tenure: 4.8yrs
  • Jason Wilson (49yo)

    Executive Vice President of Operations

    • Tenure: 0.4yrs
    • Compensation: US$427.50k
  • Vinny Jindal

    VP of Corporate Communications & Strategy

    • Colin Meyer (40yo)

      Chief Medical Officer & Executive VP of Product Development

      • Compensation: US$625.50k
    • Elaine Castellanos

      VP & Chief Accounting Officer

      • Manmeet Soni (41yo)

        CFO & Executive VP

        • Tenure: 0.4yrs
      • Claudia Bujold

        Vice President of Marketing

        • Tenure: 1.6yrs
      • Bob Reed

        CTO & Senior VP of CMC

        • Steve Harman

          VP & Chief Human Resources Officer

          • Tenure: 0.8yrs

        Board Members

        • J. Huff (65yo)

          Chairman

          • Tenure: 18yrs
          • Compensation: US$934.50k
        • William Rose (51yo)

          Independent Director

          • Tenure: 3.9yrs
          • Compensation: US$263.81k
        • Jack Nielsen (55yo)

          Lead Independent Director

          • Compensation: US$298.93k
        • Richard McGaughy (47yo)

          Independent Director

          • Tenure: 15.1yrs
          • Compensation: US$260.79k
        • Jim Bass (60yo)

          Independent Director

          • Tenure: 15.5yrs
          • Compensation: US$267.92k
        • Bill McClellan (59yo)

          Independent Director

          • Tenure: 2.8yrs
          • Compensation: US$292.93k

        Company Information

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


        Key Information

        • Name: Reata Pharmaceuticals, Inc.
        • Ticker: RETA
        • Exchange: NasdaqGM
        • Founded: 2002
        • Industry: Pharmaceuticals
        • Sector: Pharmaceuticals & Biotech
        • Market Cap: US$6.757b
        • Shares outstanding: 32.67m
        • Website: https://www.reatapharma.com

        Number of Employees


        Location

        • Reata Pharmaceuticals, Inc.
        • 5320 Legacy Drive
        • Plano
        • Texas
        • 75024
        • United States

        Listings

        TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
        RETANasdaqGM (Nasdaq Global Market)YesClass A Common StockUSUSDMay 2016
        2R3DB (Deutsche Boerse AG)YesClass A Common StockDEEURMay 2016

        Biography

        Reata Pharmaceuticals, Inc., a clinical stage biopharmaceutical company, develops novel therapeutics for patients with serious or life-threatening diseases by targeting molecular pathways that regulate cellular metabolism and inflammation. The company is developing Phase III clinical trial programs, including bardoxolone methyl (Bard) for the treatment of patients with chronic kidney disease caused by Alport syndrome, as well as for a form of pulmonary arterial hypertension associated with connective tissue disease; and omaveloxolone that is Phase II clinical trial for the treatment of patients with Friedreich’s ataxia It is also developing RTA 901, which completed Phase 1 clinical trials for the treatment of orphan neurological indications; and RORgT Inhibitors that are in the preclinical development phase for the potential treatment of a range of autoimmune, inflammatory, and fibrotic diseases. Reata Pharmaceuticals, Inc. has a strategic collaboration agreement with Kyowa Hakko Kirin Co., Ltd. to develop and commercialize Bard for renal, cardiovascular, diabetes, and various other related metabolic indications in Japan, China, Hong Kong, Macao, South Korea, Taiwan, Thailand, Singapore, the Philippines, Malaysia, Indonesia, Brunei, Vietnam, Laos, Myanmar, and Cambodia; and AbbVie Inc. to jointly research, develop, and commercialize all second- and later-generation Nrf2 activators for all indications other than renal, cardiovascular, and metabolic indications. The company was formerly known as Reata Discovery, Inc. and changed its name to Reata Pharmaceuticals, Inc. in May 2005. Reata Pharmaceuticals, Inc. was founded in 2002 and is headquartered in Plano, Texas. 


        Company Analysis and Financial Data Status

        All financial data provided by Standard & Poor's Capital IQ.
        DataLast Updated (UTC time)
        Company Analysis2020/01/24 01:27
        End of Day Share Price2020/01/23 00:00
        Earnings2019/09/30
        Annual Earnings2018/12/31


        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.