Health Check: How Prudently Does Syndax Pharmaceuticals (NASDAQ:SNDX) Use Debt?

David Iben put it well when he said, 'Volatility is not a risk we care about. What we care about is avoiding the permanent loss of capital.' So it might be obvious that you need to consider debt, when you think about how risky any given stock is, because too much debt can sink a company. Importantly, Syndax Pharmaceuticals, Inc. (NASDAQ:SNDX) does carry debt. But is this debt a concern to shareholders?

This technology could replace computers: discover the 20 stocks are working to make quantum computing a reality.

Why Does Debt Bring Risk?

Generally speaking, debt only becomes a real problem when a company can't easily pay it off, either by raising capital or with its own cash flow. In the worst case scenario, a company can go bankrupt if it cannot pay its creditors. However, a more frequent (but still costly) occurrence is where a company must issue shares at bargain-basement prices, permanently diluting shareholders, just to shore up its balance sheet. Of course, debt can be an important tool in businesses, particularly capital heavy businesses. When we examine debt levels, we first consider both cash and debt levels, together.

What Is Syndax Pharmaceuticals's Debt?

As you can see below, at the end of March 2025, Syndax Pharmaceuticals had US$343.8m of debt, up from none a year ago. Click the image for more detail. But it also has US$516.3m in cash to offset that, meaning it has US$172.5m net cash.

How Strong Is Syndax Pharmaceuticals' Balance Sheet?

Zooming in on the latest balance sheet data, we can see that Syndax Pharmaceuticals had liabilities of US$94.6m due within 12 months and liabilities of US$331.1m due beyond that. Offsetting these obligations, it had cash of US$516.3m as well as receivables valued at US$21.5m due within 12 months. So it can boast US$112.1m more liquid assets than total liabilities.

This surplus suggests that Syndax Pharmaceuticals has a conservative balance sheet, and could probably eliminate its debt without much difficulty. Simply put, the fact that Syndax Pharmaceuticals has more cash than debt is arguably a good indication that it can manage its debt safely. The balance sheet is clearly the area to focus on when you are analysing debt. But it is future earnings, more than anything, that will determine Syndax Pharmaceuticals's ability to maintain a healthy balance sheet going forward. So if you want to see what the professionals think, you might find this free report on analyst profit forecasts to be interesting.

See our latest analysis for Syndax Pharmaceuticals

While it hasn't made a profit, at least Syndax Pharmaceuticals booked its first revenue as a publicly listed company, in the last twelve months.

So How Risky Is Syndax Pharmaceuticals?

We have no doubt that loss making companies are, in general, riskier than profitable ones. And in the last year Syndax Pharmaceuticals had an earnings before interest and tax (EBIT) loss, truth be told. Indeed, in that time it burnt through US$287m of cash and made a loss of US$331m. However, it has net cash of US$172.5m, so it has a bit of time before it will need more capital. Overall, its balance sheet doesn't seem overly risky, at the moment, but we're always cautious until we see the positive free cash flow. The balance sheet is clearly the area to focus on when you are analysing debt. However, not all investment risk resides within the balance sheet - far from it. We've identified 2 warning signs with Syndax Pharmaceuticals , and understanding them should be part of your investment process.

When all is said and done, sometimes its easier to focus on companies that don't even need debt. Readers can access a list of growth stocks with zero net debt 100% free, right now.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.