GRAIL Stock To $69?
GRAIL (GRAL) stock has fallen 11% during the past day, and is currently trading at $98.27. Our multi-factor assessment suggests that it may be time to sell GRAL stock. We have, overall, a pessimistic view of the stock, and a price of $69 may not be out of reach. We believe there are only a couple of things to fear in GRAL stock given its overall Moderate operating performance and financial condition. But keeping in mind its Very High valuation, we think that the stock is Unattractive.
Below is our assessment:
| CONCLUSION | |
|---|---|
| What you pay: | |
| Valuation | Very High |
| What you get: | |
| Growth | Very Strong |
| Profitability | Very Weak |
| Financial Stability | Very Strong |
| Downturn Resilience | N/A |
| Operating Performance | Moderate |
| Stock Opinion | Unattractive |
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Let’s get into details of each of the assessed factors but before that, for quick background: With $3.5 Bil in market cap, GRAIL provides early cancer detection technologies, including screening and diagnostic tests for asymptomatic individuals and patients with suspected cancer, as well as post-diagnostic and minimal residual disease testing.
[1] Valuation Looks Very High
| GRAL | S&P 500 | |
|---|---|---|
| Price-to-Sales Ratio | 13.7 | 3.2 |
| Price-to-Earnings Ratio | -4.2 | 23.5 |
| Price-to-Free Cash Flow Ratio | -4.9 | 20.5 |
This table highlights how GRAL is valued vs broader market.
[2] Growth Is Very Strong
- GRAIL has seen its top line grow at an average rate of 22.4% over the last 3 years
- Its revenues have grown 22% from $110 Mil to $134 Mil in the last 12 months
- Also, its quarterly revenues grew 11.2% to $36 Mil in the most recent quarter from $32 Mil a year ago.
| GRAL | S&P 500 | |
|---|---|---|
| 3-Year Average | 22.4% | 5.5% |
| Latest Twelve Months* | 22.4% | 6.1% |
| Most Recent Quarter (YoY)* | 11.2% | 7.1% |
This table highlights how GRAL is growing vs broader market. For more details see: GRAL Revenue Comparison
[3] Profitability Appears Very Weak
- GRAL last 12 month operating income was $-605 Mil representing operating margin of -450.5%
- With cash flow margin of -275.6%, it generated nearly $-370 Mil in operating cash flow over this period
- For the same period, GRAL generated nearly $-443 Mil in net income, suggesting net margin of about -329.9%
| GRAL | S&P 500 | |
|---|---|---|
| Current Operating Margin | -450.5% | 18.8% |
| Current OCF Margin | -275.6% | 20.5% |
| Current Net Income Margin | -329.9% | 13.1% |
This table highlights how GRAL profitability vs broader market. For more details see: GRAL Operating Income Comparison
[4] Financial Stability Looks Very Strong
- GRAL Debt was $62 Mil at the end of the most recent quarter, while its current Market Cap is $3.5 Bil. This implies Debt-to-Equity Ratio of 3.4%
- GRAL Cash (including cash equivalents) makes up $603 Mil of $2.7 Bil in total Assets. This yields a Cash-to-Assets Ratio of 22.3%
| GRAL | S&P 500 | |
|---|---|---|
| Current Debt-to-Equity Ratio | 3.4% | 20.4% |
| Current Cash-to-Assets Ratio | 22.3% | 7.0% |
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