Erasca (ERAS) AI Stock Analysis

• Market Cap: $422.07M
• Dividend Yield: N/A
• Average Volume (3M): 1.54M
• Price to Earnings (P/E): ―
• Beta (1Y): 1.73
• Revenue Growth: N/A
• EPS Growth: 10.38%
• Country: US
• Employees: 126
• Sector: Healthcare
• Sector Strength: 74
• Industry: Biotechnology
• EPS (TTM): -0.75
• Shares Outstanding: 283,265,720
• 10 Day Avg. Volume: 1,969,094
• 30 Day Avg. Volume: 1,538,103
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 749.69
• Price to Cash Flow (P/CF): -4.80
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $5.00
• Price Target Upside: 226.80% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 3

Erasca's overall stock score is low due to its challenging financial performance, including a lack of revenue and persistent losses. The technical analysis suggests a bearish outlook, and valuation metrics highlight significant risks. While the company's strategic focus on innovative cancer therapies is positive, it does not offset the fundamental weaknesses.

Positive Factors

Clinical Performance

Naporafenib has performed well in melanoma with a competitive clinical profile, showing a higher overall response rate compared to standard chemotherapy and MEK inhibitors.

Innovation

ERAS-0015 and ERAS-4001 differentiate themselves from existing RAS inhibitors by targeting broader RAS mutations and employing novel mechanisms of action.

Regulatory Progress

ERAS has received alignment on its approval strategy from both the US and EU regulatory agencies for a tissue-specific indication in melanoma.

Negative Factors

Clinical Challenges

Durable responses were only seen in melanoma patients, with no responses in CRC and PDAC patients, leading to a shift away from a tissue-agnostic approach.

Development Timeline

It will take time for clinical data to be generated for ERAS-0015 and ERAS-4001.

Efficacy Limitations

Efficacy in non-melanoma tumor types was limited, with a 23% response rate, which was anticipated given the complex MAPK feedback across different tissue types.

Erasca Business Overview & Revenue Model

Company Description

Erasca, Inc., a clinical-stage biopharmaceutical company, focuses on discovering, developing, and commercializing therapies for patients with RAS/MAPK pathway-driven cancers. The company's lead candidates include ERAS-007, an oral inhibitor of ERK1/2 for the treatment of non-small cell lung cancer, colorectal cancer, and acute myeloid leukemia; and ERAS-601, an oral SHP2 inhibitor for patients with advanced or metastatic solid tumors. It is also developing ERAS-801, a central nervous system-penetrant EGFR inhibitor for the treatment of patients with recurrent glioblastoma multiforme. The company was incorporated in 2018 and is headquartered in San Diego, California.

How the Company Makes Money

Erasca makes money primarily through partnerships and collaborations with other pharmaceutical and biotechnology companies, focusing on the development and commercialization of its drug candidates. As a clinical-stage company, Erasca is not yet generating revenue from product sales, but it may receive milestone payments, research funding, and potential royalties from strategic alliances. The company also relies on equity financing and public offerings to fund its operations and R&D activities.

Erasca Financial Statement Overview

Summary

Erasca is in an early stage of development, typical for biotechnology companies, facing significant financial challenges. The income statement shows negative profitability with low gross profit and deeply negative net profit margins. The balance sheet indicates a stable cash position but a high debt-to-equity ratio, posing potential risks. Cash flow is negative, with operational inefficiencies evident, highlighting the need for revenue growth and operational improvements.

Income Statement

Erasca's income statement shows a challenging financial position with negative net income and EBIT over multiple periods. The company only recently reported positive revenue in the TTM (Trailing-Twelve-Months), indicating early-stage commercialization in its operations. However, gross profit remains low, and net profit margins are deeply negative, highlighting persistent operational challenges and significant room for improvement.

Balance Sheet

The balance sheet reflects a relatively stable cash position with a positive equity balance in the latest TTM period. Despite this, Erasca has a high debt-to-equity ratio due to substantial liabilities relative to equity, which could pose a risk if cash reserves deplete. The equity ratio improved significantly, evidencing better asset management and capitalization efforts.

Cash Flow

Erasca's cash flow statement highlights negative free cash flow, indicating the company is consuming cash faster than it generates. The operating cash flow to net income ratio is unfavorable, pointing to operational inefficiencies. Although financing activities have been significant, supporting cash position, continued negative free cash flow growth flags a need for operational optimization.

Breakdown
TTM	Dec 2023	Dec 2022	Dec 2021	Dec 2020	Dec 2019
Income Statement		Total Revenue
5.58M	0.00	0.00	0.00	0.00	0.00
	Gross Profit
2.54M	-3.73M	-2.64M	-829.00K	-540.00K	-310.00K
	EBIT
-155.25M	-141.53M	-247.45M	-124.88M	34.24M	-13.29M
	EBITDA
-151.33M	-121.31M	-240.16M	-121.94M	-101.12M	-12.98M
	Net Income Common Stockholders
-159.12M	-125.04M	-238.16M	-150.09M	-173.07M	-10.74M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
50.37M	312.35M	435.62M	459.25M	118.70M	50.37M
	Total Assets
0.00	395.30M	514.91M	501.42M	124.83M	55.51M
	Total Debt
0.00	55.86M	55.10M	18.79M	2.99M	3.69M
	Net Debt
50.37M	-37.22M	-229.12M	-341.70M	-62.39M	-25.89M
	Total Liabilities
0.00	78.61M	103.06M	44.89M	238.81M	69.12M
	Stockholders Equity
49.80M	316.69M	-480.97M	-238.17M	-113.98M	-13.60M
Cash Flow		Free Cash Flow
-109.78M	-102.99M	-119.81M	-98.48M	-71.38M	-10.97M
	Operating Cash Flow
-109.64M	-101.22M	-103.26M	-79.60M	-32.69M	-10.38M
	Investing Cash Flow
-174.69M	-91.22M	-71.08M	-64.59M	-71.20M	-20.89M
	Financing Cash Flow
240.35M	1.29M	98.08M	439.40M	139.99M	16.86M

Erasca Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1.53
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ERAS, the sentiment is Positive. The current price of 1.53 is above the 20-day moving average (MA) of 1.44, below the 50-day MA of 1.64, and below the 200-day MA of 2.45, indicating a neutral trend. The MACD of -0.04 indicates Negative momentum. The RSI at 47.14 is Neutral, neither overbought nor oversold. The STOCH value of 53.01 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ERAS.

Erasca Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
BPMC	52 Neutral	$5.67B	―	-31.26%	―	104.04%	87.80%
BEAM	50 Neutral	$2.40B	―	-43.94%	―	-83.18%	-144.95%
Sector *	49 Neutral	$6.94B	0.66	-52.58%	2.47%	22.65%	0.94%
CRSP	46 Neutral	$3.66B	―	-19.20%	―	-89.95%	-123.71%
FATE	42 Neutral	$104.73M	―	-54.21%	―	-78.55%	-0.92%
NTLA	39 Underperform	$963.75M	―	-54.00%	―	59.55%	3.09%
ERAS	32 Underperform	$422.07M	―	-43.68%	―	―	10.38%

Erasca Corporate Events

Erasca Highlights Strategic Focus at Healthcare Conference

Erasca, Inc. has updated its corporate presentation to include recent business and strategic developments, which will be showcased at the J.P. Morgan Healthcare Conference. The company plans to use its website for future updates and has emphasized its strategic focus on disrupting the RAS/MAPK pathway. This announcement highlights Erasca’s commitment to cancer therapy innovation and reflects its strategic efforts to maintain a strong position in the biotechnology industry.