Q32 Bio (QTTB) AI Stock Analysis

• Market Cap: $23.14M
• Dividend Yield: N/A
• Average Volume (3M): 243.69K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.10
• Revenue Growth: -100.00%
• EPS Growth: 83.27%
• Country: US
• Employees: 7
• Sector: Healthcare
• Sector Strength: 78
• Industry: Biotechnology
• EPS (TTM): -14.21
• Shares Outstanding: 12,180,701
• 10 Day Avg. Volume: 199,331
• 30 Day Avg. Volume: 243,694
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 21.71
• Price to Cash Flow (P/CF): -0.30
• 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: $8.33
• Price Target Upside: 338.42% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 3

Q32 Bio's overall stock score reflects significant financial and operational challenges, with declining revenues and negative cash flow. While technical indicators suggest bearish sentiment, recent clinical trial advancements offer a glimmer of hope for future growth. However, the current financial trajectory and valuation concerns weigh heavily on the stock's potential, resulting in a low overall score.

Positive Factors

Strategic Focus

The decision to focus on bempikibart development seems to signal confidence in the drug.

Negative Factors

Discontinuation of ADX-097

Due to the discontinuation of ADX-097 development, the target price is lowered to $3 from $22, and QTTB is downgraded to Market Perform.

Valuation Concerns

The drug's early clinical profile is not compelling enough to merit meaningful value beyond current assumptions.

Q32 Bio Business Overview & Revenue Model

Company Description

Homology Medicines, Inc. operates as a technology platform to design and develop treatments to address rare diseases at the genetic level. It develops genetic medicines by translating proprietary, next generation gene editing and gene therapy technologies into novel treatments for patients with rare diseases. The company was founded by Saswati Chatterjee in 2015 and is headquartered in Bedford, MA.

How the Company Makes Money

Q32 Bio makes money primarily through the development and commercialization of its therapeutic candidates. The company's revenue model is centered around advancing its drug candidates through the various stages of clinical trials, obtaining regulatory approvals, and subsequently launching these therapies in the market. Revenue streams may include upfront payments, milestone payments, and royalties from partnerships and collaborations with larger pharmaceutical companies. These partnerships are crucial as they provide financial support and resources necessary for the expensive and lengthy drug development process. Additionally, Q32 Bio may also seek funding through private investments, grants, and public offerings to support its operations and research activities.

Q32 Bio Financial Statement Overview

Summary

Q32 Bio's financial performance is weak, with declining revenues, persistent losses, and a negative cash flow situation. While there is a slight improvement in equity levels and reduced liabilities, the company faces significant operational and cash flow challenges, raising concerns about its ability to sustain operations.

Income Statement

Q32 Bio has demonstrated a concerning trend in its income statement metrics. The company has shown a significant decline in revenue over the years, from $33.97M in 2021 to $0 in the latest TTM period. Gross profit and net profit margins are negative, reflecting an inability to cover operational costs with existing revenues. The EBIT and EBITDA margins have also been consistently negative, indicating operational inefficiencies and a lack of profitability.

Balance Sheet

The balance sheet displays a mixed picture. The debt-to-equity ratio improved in the latest TTM period due to reduced liabilities and equity levels, but remains a concern given the company's negative equity in previous years. The equity ratio has been severely impacted by negative equity in past periods, although there is some recovery in the TTM period. The overall financial stability is questionable due to historical high leverage and negative equity.

Cash Flow

Cash flow metrics highlight significant challenges in cash management. The company had negative operating and free cash flows in recent periods, indicating a continuous drain on cash reserves. The operating cash flow to net income ratio is unfavorable, suggesting inefficiencies in converting income into cash. Despite a high financing cash flow in the TTM period, reliance on external financing is not sustainable long-term without improving operational cash generation.

Breakdown
TTM	Dec 2023	Dec 2022	Dec 2021	Dec 2020	Dec 2019
Income Statement		Total Revenue
0.00	1.16M	6.65M	33.97M	2.70M	1.67M
	Gross Profit
-244.00K	578.00K	4.05M	24.43M	2.70M	1.67M
	EBIT
-60.99M	-92.10M	-39.23M	-36.69M	-130.26M	-109.94M
	EBITDA
-53.36M	-86.50M	-38.85M	-86.22M	-121.36M	-103.63M
	Net Income Common Stockholders
-49.66M	-112.96M	-42.81M	-37.56M	-128.69M	-103.92M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
256.13M	82.65M	43.89M	32.25M	217.43M	262.39M
	Total Assets
310.96M	306.12M	61.77M	35.15M	263.74M	310.57M
	Total Debt
23.98M	1.32M	44.73M	4.97M	15.44M	0.00
	Net Debt
-224.14M	-37.95M	838.00K	-27.27M	-201.99M	-53.77M
	Total Liabilities
44.70M	233.13M	192.49M	124.36M	67.74M	52.06M
	Stockholders Equity
266.25M	72.99M	-130.71M	-89.21M	196.00M	258.51M
Cash Flow		Free Cash Flow
-77.94M	-96.46M	-13.44M	-33.14M	-98.06M	-113.19M
	Operating Cash Flow
-77.86M	-96.23M	-10.96M	-32.98M	-94.33M	-91.36M
	Investing Cash Flow
51.64M	101.33M	-2.47M	-157.00K	204.90M	-51.80M
	Financing Cash Flow
94.83M	184.00K	30.07M	20.11M	53.09M	158.21M

Q32 Bio Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 1.90
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Positive
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For QTTB, the sentiment is Negative. The current price of 1.9 is below the 20-day moving average (MA) of 2.39, below the 50-day MA of 2.94, and below the 200-day MA of 25.32, indicating a bearish trend. The MACD of -0.53 indicates Negative momentum. The RSI at 23.79 is Positive, neither overbought nor oversold. The STOCH value of 17.09 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for QTTB.

Q32 Bio Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
VRTX	64 Neutral	$128.40B	―	-3.15%	―	11.64%	-114.72%
Sector *	49 Neutral	$6.90B	-0.08	-53.01%	2.43%	24.84%	-3.06%
ALNY	49 Neutral	$30.91B	―	-414.62%	―	22.97%	38.54%
CRSP	48 Neutral	$3.72B	―	-19.20%	―	-89.95%	-123.71%
EDIT	42 Neutral	$129.44M	―	-98.10%	―	-58.64%	-40.05%
NTLA	39 Underperform	$962.71M	―	-54.00%	―	59.55%	3.09%
QTTB	36 Underperform	$23.14M	―	-93.26%	―	-100.00%	83.27%

Q32 Bio Corporate Events

Q32 Bio Advances Clinical Trials for Growth Opportunities

Q32 Bio announced updates to its corporate presentation, highlighting the progress in clinical trials for its lead products. The company is advancing its bempikibart program, demonstrating potential in treating alopecia areata with durable effects and favorable safety, and plans to initiate a Phase 2a Part B trial. Additionally, ADX-097 is being tested in a Phase 2 renal basket trial, with multiple data readouts expected in 2025, positioning Q32 for significant growth opportunities.

Q32 Bio Announces Mixed Results in Clinical Trials

Q32 Bio announced encouraging results from its SIGNAL-AA Phase 2a trial for bempikibart in treating alopecia areata, demonstrating clinical activity and a favorable safety profile, prompting plans to expand the trial. However, its SIGNAL-AD trial for atopic dermatitis did not meet its primary endpoint, leading the company to plan a review of the results.