Scholar Rock Holding (SRRK) AI Stock Analysis

• Market Cap: $3.13B
• Dividend Yield: N/A
• Average Volume (3M): 929.91K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.90
• Revenue Growth: N/A
• EPS Growth: -22.34%
• Country: US
• Employees: 128
• Sector: Healthcare
• Sector Strength: 74
• Industry: Biotechnology
• EPS (TTM): -2.57
• Shares Outstanding: 94,676,765
• 10 Day Avg. Volume: 1,134,659
• 30 Day Avg. Volume: 929,910
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 1837.68
• Price to Cash Flow (P/CF): -15.80
• 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: $52.33
• Price Target Upside: 54.78% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 5

Scholar Rock Holding is experiencing significant financial challenges due to its lack of revenue and ongoing losses, which are major concerns for its stock valuation and financial health. Although the company's strong liquidity position and low leverage provide some stability, the negative cash flows highlight the reliance on external funding. Technical indicators suggest bearish momentum, and valuation metrics are unfavorable due to negative earnings. The positive outlook from recent earnings calls, including progress in SMA therapies, provides some optimism, but regulatory and competitive challenges persist, keeping the overall score subdued.

Positive Factors

Market Potential

SMA is a sizable $4-5B established commercial market where SRRK could capture at least $1-2B.

Regulatory Milestones

The FDA has granted apitegromab Fast Track, Orphan Drug, and Rare Pediatric Disease designations.

Research and Development

Scholar Rock's research platform could enable selective targeting of TGF-β proteins, with apitegromab potentially being the first effective and safe myostatin inhibitor.

Negative Factors

Competition and Market Position

Stock is $4B and inexpensive given SMA is a ~$4B established commercial market and SRRK looks best positioned for at least $1-2B peak after BHVN failed.

Market Interpretation Risks

There may be headline risk on how investors would interpret the data and the % or kg reduction of lean muscle loss.

Scholar Rock Holding Business Overview & Revenue Model

Company Description

Scholar Rock Holding Corporation, a biopharmaceutical company, focuses on the discovery and development of medicines for the treatment of serious diseases in which signaling by protein growth factors plays a fundamental role. The company develops Apitegromab, an inhibitor of the activation of latent myostatin that has completed the Phase 3 clinical trials for the treatment of spinal muscular atrophy; and SRK-181, which is in Phase 1 clinical trials for the treatment of cancers that are resistant to checkpoint inhibitor therapies, such as anti-PD-1 or anti-PD-L1 antibody therapies. It is also developing a pipeline of novel product candidates with potential to transform the lives of patients suffering from a range of serious diseases, including neuromuscular disorders, cancer, and fibrosis. The company has a collaboration agreement with Gilead Sciences, Inc. to discover and develop specific inhibitors of transforming growth factor beta activation for the treatment of fibrotic diseases. Scholar Rock Holding Corporation was founded in 2012 and is headquartered in Cambridge, Massachusetts.

How the Company Makes Money

Scholar Rock makes money primarily through the development and commercialization of its proprietary drug candidates. The company's revenue model includes partnerships and collaborations with larger pharmaceutical companies, which provide upfront payments, milestone payments, and royalties on future sales of successfully developed drugs. Additionally, Scholar Rock may generate income through licensing agreements, where it grants other companies the rights to develop and market its therapeutic candidates. The company's financial performance is heavily influenced by the progress of its clinical trials, regulatory approvals, and the successful commercialization of its products.

Scholar Rock Holding Financial Statement Overview

Summary

Scholar Rock Holding is facing significant challenges with no revenue generation and ongoing net losses, impacting its income statement. The balance sheet is stable with strong liquidity and low leverage, but continued losses could affect equity. Cash flows are negative, indicating reliance on external financing. Overall, the financial outlook is concerning, with critical focus needed on revenue generation and cost management.

Income Statement

Scholar Rock Holding has shown no revenue for 2023 and 2024, indicating an absence of sales or other income-generating activities. The company is operating at a loss, with a significantly negative net income. Gross profit is also at zero, and the company has declining EBIT and EBITDA margins due to increasing expenses relative to revenues. The lack of revenue growth is concerning for future profitability.

Balance Sheet

Scholar Rock Holding maintains a moderate equity base relative to its total assets, with an equity ratio around 77.6% in 2024. The debt-to-equity ratio is low at 0.18, suggesting conservative leverage. However, the company is incurring losses, which could impact future equity levels. Positive cash and cash equivalents indicate good liquidity.

Cash Flow

The company experiences negative operating cash flow, which raises concerns about its ability to sustain operations without external financing. Free cash flow is also negative, indicating that the company is not generating cash from its core operations. However, financing activities have provided substantial cash inflows, helping to mitigate cash flow deficiencies.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
0.00	0.00	33.19M	18.82M	15.40M
	Gross Profit
0.00	-2.84M	23.31M	9.79M	-58.66M
	EBIT
-252.05M	-171.29M	-134.37M	-129.92M	-86.88M
	EBITDA
-252.05M	-168.45M	-131.38M	-127.29M	-85.39M
	Net Income Common Stockholders
-246.29M	-165.79M	-131.65M	-131.80M	-84.99M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
437.28M	279.94M	315.36M	252.99M	341.03M
	Total Assets
474.92M	311.04M	358.17M	304.44M	388.31M
	Total Debt
65.13M	61.82M	69.40M	77.06M	57.14M
	Net Debt
-112.75M	-40.04M	-33.88M	-135.78M	-103.22M
	Total Liabilities
106.29M	85.82M	97.93M	132.37M	127.53M
	Stockholders Equity
368.63M	225.22M	260.24M	172.07M	260.77M
Cash Flow		Free Cash Flow
-201.05M	-145.30M	-133.76M	-132.04M	-64.36M
	Operating Cash Flow
-200.95M	-145.23M	-132.69M	-126.79M	-60.27M
	Investing Cash Flow
-76.06M	41.14M	-171.70M	134.31M	-63.50M
	Financing Cash Flow
353.03M	102.57M	194.83M	44.95M	247.82M

Scholar Rock Holding Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 33.81
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SRRK, the sentiment is Neutral. The current price of 33.81 is below the 20-day moving average (MA) of 35.37, below the 50-day MA of 38.62, and above the 200-day MA of 24.71, indicating a neutral trend. The MACD of -1.36 indicates Positive momentum. The RSI at 39.37 is Neutral, neither overbought nor oversold. The STOCH value of 12.93 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for SRRK.

Scholar Rock Holding Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
BMRN	78 Outperform	$13.59B	32.73	8.05%	―	17.35%	151.40%
SRPT	67 Neutral	$7.41B	32.02	19.71%	―	52.97%	―
VRTX	64 Neutral	$129.22B	―	-3.15%	―	11.64%	-114.72%
ALNY	59 Neutral	$36.86B	―	-414.62%	―	22.97%	38.54%
Sector *	49 Neutral	$6.94B	0.66	-52.58%	2.47%	22.65%	0.94%
SRRK	45 Neutral	$3.13B	―	-82.95%	―	―	-22.34%
BLUE	42 Neutral	$37.99M	―	-270.20%	―	144.50%	-141.91%

Scholar Rock Holding Corporate Events

Scholar Rock Holding Appoints Interim Financial Officer

Scholar Rock Holding Corporation announced the appointment of Erin Moore as interim Principal Financial Officer and interim Principal Accounting Officer, effective March 21, 2025, following the departure of Edward Myles. Moore, who has been with the company since 2018 and holds extensive financial and accounting credentials, will temporarily oversee financial operations. Additionally, the company scheduled its 2025 Annual Meeting of Stockholders for May 22, 2025, with March 26, 2025, set as the record date for stockholders entitled to vote. The deadline for stockholder proposals is March 31, 2025, adhering to the Securities Exchange Act regulations.

Scholar Rock Advances SMA Program with Apitegromab Submission

Scholar Rock reported its financial results for 2024, highlighting significant progress in its SMA program with the submission of a Biologics License Application for apitegromab, anticipated to launch in the U.S. in late 2025. The company also plans to expand its research into other neuromuscular disorders and cardiometabolic indications, supported by a strong financial position and recent public offering.

Scholar Rock Announces Leadership Changes and Strategic Growth

On January 29, 2025, Scholar Rock announced the appointment of Lisa Wyman as Chief Technical and Quality Officer, effective January 27, 2025, as part of a planned leadership transition. This change comes as the company eliminates the Chief Operating Officer role and seeks a new Chief Financial Officer. Edward H. Myles, the current COO and CFO, will transition to a Senior Advisor role after March 15, 2025. This transition supports Scholar Rock’s growth into a fully integrated biopharma company as it anticipates its first drug approval and commercial launch in 2025. Ms. Wyman’s extensive experience in technical and quality operations is expected to be instrumental in the company’s evolution and readiness for market expansion.

Scholar Rock Highlights Apitegromab Progress at JP Morgan

Scholar Rock Holding Corporation announced its participation in the 43rd Annual J.P. Morgan Healthcare Conference on January 14, 2025, where it will present its strategic advancements and future plans. The company is progressing with the development and potential commercialization of apitegromab, a promising therapy for spinal muscular atrophy (SMA), after successful Phase 3 trial results. With a focus on expanding its pipeline, Scholar Rock aims to submit regulatory filings for apitegromab in early 2025 and explore additional indications, positioning itself as a leader in the treatment of SMA and related conditions.