ABIO  Arca Biopharma Inc.

Exchange

NASDAQ

Sector

Health Care

Industry

Biotechnology: In Vitro & In Vivo Diagnostic Substances

Market Cap.

14.10M

Vuru Grade

49.00/100

Current Price

$1.20
+0.03 (+2.13%)

Stability Price

$3.86
Undervalued by 222.04%

Company Metrics

  • P/E 1.34
  • P/S 0
  • P/B 0.81
  • EPS -2.05
  • Cash ROIC 407.41%
  • Cash Ratio 8.83
  • Dividend 0 / N/A %
  • Avg. Vol. 190,839.00
  • Shares 9.07M
  • Market Cap. 14.10M

Company Description

ARCA biopharma, Inc., a biopharmaceutical company, engages in the development of genetically-targeted therapies for cardiovascular diseases. Its principal product candidate, Gencaro (bucindolol hydrochloride), is an investigational, pharmacologically unique beta-blocker and mild vasodilator being developed for the treatment of chronic heart failure and also for the prevention of atrial fibrillatio... more


Download 10 Years of Financial Statements:
Income Statement   Balance Sheet   Cash Flow

News

BRIEF-Arca Biopharma Inc says‍ it entered into amendment no. 1 to its capital ...
Reuters - Aug 21, 2017
BRIEF-Arca Biopharma Inc says‍ it entered into amendment no. 1 to its capital on demand sales agreement. Reuters Staff. 1 Min Read.
ARCA biopharma to Present at the Sidoti & Company Fall 2017 Conference
GlobeNewswire (press release) - Sep 21, 2017
WESTMINSTER, Colo., Sept. 21, 2017 (GLOBE NEWSWIRE) -- ARCA biopharma, Inc. (Nasdaq:ABIO), a biopharmaceutical company applying a precision medicine approach to developing genetically-targeted therapies for cardiovascular diseases, today ...
ARCA biopharma (ABIO) Getting Somewhat Positive Media Coverage, Study Finds - StockNewsTimes
ARCA biopharma Announces Second Quarter 2017 Financial Results and Provides ...
GlobeNewswire (press release) - Aug 3, 2017
WESTMINSTER, Colo., Aug. 03, 2017 (GLOBE NEWSWIRE) -- ARCA biopharma, Inc. (Nasdaq:ABIO), a biopharmaceutical company applying a precision medicine approach to developing genetically-targeted therapies for cardiovascular diseases, today ...
ARCA Biopharma: Low Valuation On Past Failures, High Upside And Limited Risk ...
Seeking Alpha - Nov 30, 2016
ARCA Biopharma (NASDAQ: ABIO) is a development stage biotech company that has been beaten down over several decades. Their flagship therapeutic candidate, Gencaro® is a beta-blocker that has seen multiple efficacy issues in outcomes measures.
Why Arca Biopharma Is A Buy
Seeking Alpha - Jan 14, 2014
Arca Biopharma (NASDAQ:ABIO) is a pre-revenue company that has patents through 2029 covering the drug Gencaro (generic: bucindolol).
ARCA biopharma Announces Completion of Enrollment for GENETIC-AF Phase 2B ...
GlobeNewswire (press release) - Aug 16, 2017
WESTMINSTER, Colo., Aug. 16, 2017 (GLOBE NEWSWIRE) -- ARCA biopharma, Inc. (Nasdaq:ABIO), a biopharmaceutical company applying a precision medicine approach to developing genetically-targeted therapies for cardiovascular diseases, today ...
ARCA Biopharma Announces Database Lock for GENETIC-AF Phase 2B Interim ...
GlobeNewswire (press release) - Jun 20, 2017
WESTMINSTER, Colo., June 20, 2017 (GLOBE NEWSWIRE) -- ARCA biopharma, Inc. (Nasdaq:ABIO), a biopharmaceutical company applying a precision medicine approach to developing genetically-targeted therapies for cardiovascular diseases, today ...
ARCA biopharma Announces GENETIC-AF Data and Safety Monitoring Board ...
GlobeNewswire (press release) - Aug 9, 2017
WESTMINSTER, Colo., Aug. 09, 2017 (GLOBE NEWSWIRE) -- ARCA biopharma, Inc. (Nasdaq:ABIO), a biopharmaceutical company applying a precision medicine approach to developing genetically-targeted therapies for cardiovascular diseases, today ...
Will You Be Burnt By ARCA biopharma Inc's (ABIO) Cash Burn?
Simply Wall St - Sep 22, 2017
ARCA biopharma Inc (NASDAQ:ABIO) announced a loss of -$18.76M in its most recent earnings update. Although some investors expected this, their belief in the path to profitability for ABIO may be wavering.
ARCA biopharma, Inc. (NASDAQ:ABIO) Experiences Heavier than Usual Trading Volume - First News 24
ARCA biopharma, Inc. (NASDAQ:ABIO) Sees Significantly Higher Trading Volume - HugoPress
Who Really Owns ARCA biopharma Inc (ABIO)?
Simply Wall St - Aug 31, 2017
In this article, I'm going to take a look at ARCA biopharma Inc's (NASDAQ:ABIO) latest ownership structure, a non-fundamental factor which is important, but remains a less discussed subject among investors.
Growth Rate Assumed by Market

We did a reverse valuation to calculate the growth rate the market is assuming for ABIO to be considered fairly valued at its current market price. It's useful to compare this to the growth rate we're assuming for the Growth Price.

Future Free Cash Flow Growth Rate

This is the annual growth rate we've applied to calculate ABIO's Free Cash Flow for the next 10 years. To calculate it, we looked at several time periods of the last 10 years. Feel free to adjust it, but we limit the initial growth rate to 20% and slow it down over the years. Otherwise, long-term sustainability issues come into play.

Discount Rate

The discount rate is the annual rate of return an investor requires to take the risk of investing in a single stock. To account for that risk, this should be above 8-10%, as this is the avg. annual rate of return for the S&P500 over the past 100 years.

$1.20 Current Price

$-8.20 Growth Price (DCF)

Why is this negative?


Show Free Cash Flow numbers

$3.86 Stability Price (EPV)

Undervalued by 222.04%


Discount Rate: 15.0%

$2.10 NCA Price

Undervalued by 74.71%

$3.64 Book Price

Undervalued by 203.12%


Varying Cash Return on Invested Capital over the past 5 years

ABIO has efficiently invested its financial resources in buildings, projects, and equipment, resulting in strong returns. However, there is a substantial variation in their Cash ROIC from year-to-year. This company may have unreliable free cash flow or operates in a business where invested capital costs increase substantially on a sporadic basis. Look at reasons for this inconsistency to determine the likelihood of future sustainability.

ABIO has created $407.41 of cash for every $100 invested.
Figures in USD. Fiscal year ends in December
20122013201420152016
Free Cash Flow - -5.32M -9.43M -10.55M -15.00M
divided by
Invested Capital -13,000.00 -1.17M -610,000.00 -732,000.00 1.07M
Cash ROIC - 453.15% 1,545.08% 1,440.57% -1,401.78%

Very Poor Return on Equity over the past 5 years

ABIO has shown an inability to deliver results for shareholders. This could be due to poor management, ABIO operating in a highly competitive industry, or having a weak business in general.

ABIO has generated a $72.61 loss for every $100 of Shareholders' Equity.
Figures in USD. Fiscal year ends in December
20122013201420152016
Net Income -4.32M -6.94M -9.69M -11.45M -16.44M
divided by
Stockholders' Equity 2.91M 15.58M 14.74M 38.07M 22.19M
Return on Equity -148.61% -44.54% -65.73% -30.06% -74.09%

Poor Business Performance over the past 10 years

ABIO's inability to produce positive free cash flow for the majority of the past 10 years is concerning. It should be a red flag, since this company does not have a track record of delivering results for shareholders. This could be due to poor management or the nature of its business.

ABIO has been losing money for the majority of the past 10 years.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Free Cash Flow -46.34M -46.73M -41.91M -8.33M -6.98M - -5.32M -9.43M -10.55M -15.00M

Very Strong Balance Sheet

ABIO has more Cash than its Total Liabilities, resulting in $2.07 Net Cash per share. In other words, if you buy ABIO today, the price you're paying for shares is actually $-0.87 because $2.07 of Cash is included in the current share price. This much Cash is very healthy. It can help ABIO sustain itself in the face of any economic turmoil and makes a stock buyback more of a possibility.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Cash 97.57M 50.97M 7.76M 7.03M 5.94M 2.92M 16.76M 15.35M 38.80M 21.16M
Current Assets 99.99M 52.13M 8.29M 7.16M 6.21M 3.05M 16.93M 15.49M 38.92M 21.45M
Total Assets 120.68M 66.05M 9.37M 8.16M 6.50M 3.21M 17.08M 16.13M 39.57M 24.63M
Current Liabilities 18.19M 11.35M 1.64M 1.19M 754,000.00 305,000.00 1.50M 1.39M 1.50M 2.40M
Total Liabilities 53.02M 23.54M 1.96M 1.39M 770,000.00 305,000.00 1.50M 1.39M 1.50M 2.44M
Stockholder' Equity 67.66M 42.51M 7.41M 6.77M 5.73M 2.91M 15.58M 14.74M 38.07M 22.19M
Current Ratio 5.50 4.59 5.04 6.02 8.24 9.98 11.27 11.16 25.88 8.95
TL-to-TA 0.44 0.36 0.21 0.17 0.12 0.09 0.09 0.09 0.04 0.10

Low or No Reinvestment of Profits over the past 10 years

ABIO has either been retaining a small amount of their earnings or has done so inconsistently. A lack of consistency could be due to ABIO operating at a loss or them having such a strong economic moat they feel comfortable spending profits on growth. Be wary of future prospects and if applicable, inspect the moat's sustainability.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Retained Earnings -470.51M -500.44M -49.89M -58.31M -63.67M -67.99M -74.93M -84.62M -96.07M -112.51M
Retained Earnings Growth - -6.36% 90.03% -16.88% -9.20% -6.78% -10.21% -12.93% -13.52% -17.12%

Erratic Net Profit Margins over the past 10 years

ABIO has had highly erratic net profit margins which are a great cause for concern. This company may operate in a highly volatile industry, or it may just have poor performance. Look at reasons for this inconsistency to understand if there is any reason to look past it.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Net Income -12.30M -29.92M -9.14M -8.42M -5.36M -4.32M -6.94M -9.69M -11.45M -16.44M
divided by
Revenue 46.86M 15.25M - - - - - - - -
Net Profit Margin -26.25% -196.20% - - - - - - - -

Inconsistent Gross Profit Margins over the past 10 years

ABIO has good gross profit margins, however inconsistency of these margins is a cause for concern. Look at reasons for this inconsistency to determine the likelihood of future sustainability.

$20.00 of every $100 worth of sales have been Gross Profit, on average over the past 10 years.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Gross Profit 46.86M 15.25M - - -2.32M - - - - -
divided by
Revenue 46.86M 15.25M - - - - - - - -
Gross Margin 100.00% 100.00% - - - - - - - -

Low Capital Intensity over the past 10 years

ABIO has consistently used a small portion of their Net Income buying new equipment or investing in new facilities. This indicates that ABIO may require minimal investment to stay competitive. This leaves them with extra money to spend on growing their business and potentially buying back stock.

-% of Profits are being spent on Capital Expenditures, like Property, Plant, & Equipment, required to run the business.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Capital Expenditure 381,000.00 222,000.00 185,000.00 4,000.00 19,000.00 - 32,000.00 19,000.00 11,000.00 12,000.00
divided by
Net Income -12.30M -29.92M -9.14M -8.42M -5.36M -4.32M -6.94M -9.69M -11.45M -16.44M
Capital Expenditure Ratio -3.10% -0.74% -2.02% -0.05% -0.35% - -0.46% -0.20% -0.10% -0.07%

No Dividend History over the past 10 years

ABIO has never distributed dividends or has recently suspended their dividend distribution.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Dividend Paid - - - - - - - - - -
divided by
Shares Outstanding 2.67M 2.68M 7.09M 8.51M 10.04M 2.22M 8.63M 20.50M 6.29M 9.07M
Dividend Paid Per Share - - - - - - - - - -
Price at Year End 38.00 6.20 3.19 3.21 1.00 0.38 1.70 0.92 4.93 2.85
Dividend Yield - - - - - - - - - -

History of Stock Buybacks over the past 10 years

ABIO has some history of delivering increased value for shareholders in the form of stock buybacks. These have helped improve financial metrics and increase each shareholders' relative ownership stake in the company, due to fewer shares outstanding and holding the same number of shares.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Shares Outstanding 2.67M 2.68M 7.09M 8.51M 10.04M 2.22M 8.63M 20.50M 6.29M 9.07M
Stock Bought Back - -0.46% -62.23% -16.62% -15.26% 351.46% -74.23% -57.91% 225.97% -30.64%
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