Xeris Pharmaceuticals

Xeris Biopharma Holdings Inc earns a 2-star quantitative star rating, illustrating our stance that this share class is a somewhat unattractive choice, and investors should look elsewhere for more fruitful opportunities. The stock currently trades at a 19% premium over our quantitative fair value estimate of $8.54 per share; however, this estimate should be taken with a pinch of salt due to its high uncertainty rating.

The firm's valuation metrics decrease our fair value estimate. A company's valuation metrics provide insights into the market's expectations for its future growth and profitability. Reflecting the firm's valuation is its enterprise value to EBITDA ratio of 23.7, which sits in the top 30% compared with peers globally. This suggests that the value of its enterprise value, or the value of its shares and debt, is a high multiple of the generated EBITDA. We believe this is a sign that shares could be overvalued.

The company's lack of profitability is an additional cause for concern. Companies with low profitability are often less resilient in recessions and are likely to generate weaker future cash flows for shareholders. The firm's earnings yield of 2.5%, a core component of profitability, ranks in the bottom 45% compared with global peers. The earnings generated by the company relative to its share price is concerning, which further promotes our unfavorable price/fair value ratio.

With its quantitative economic moat rating of none, we do not expect this company to materially outearn its cost of capital in the long run. Additionally, the firm's moderate financial health score suggests it is acceptably positioned against adverse economic circumstances.