Asset Breakdown
| Total Assets | 6.43 Million | |
| Net Tangible Assets | 7.27 Million | |
| Non Current Assets Total | 0.0 | |
| Other Current Assets | 470,995 | |
| Total Current Assets | 6.43 Million | |
| Non Currrent Assets Other | 44,573.6 | |
| Other Assets | 456 Million |
Should I drop my Dermata (USA Stocks:DRMA) position?
 | By Rifka Kats | Macroaxis Story |
In the world of investing, opportunity often arises from adversity. Dermata Therapeutics (NASDAQ: DRMA) has recently captured investor attention, soaring over 29% despite prevailing market headwinds. This late-stage medical dermatology company, which focuses on developing treatments for various skin conditions, is currently navigating a challenging financial landscape, with a net income loss of 7.8M and retained earnings reflecting a deficit of 53.4M. However, with an end-period cash flow of 7.4M and a promising pipeline, including the lead product candidate DMT310, the stock presents a compelling buy opportunity. Analysts project a significant upside, with target prices ranging from 81.9 to 99.9, suggesting that the current trading price around 3.18 may be undervalued. Investors should consider the potential for recovery and growth as Dermata Therapeutics continues to advance its clinical trials and capitalize on its innovative product offerings. Dermata Therapeutics' stock is experiencing above-average trading activity. The Price-to-Book (P/B) ratio is projected to rise significantly based on recent reports. This year's Book Value Per Share is expected to grow to $34.23, while the market capitalization is forecasted to decline to approximately $1.7 million. Although many traders are overly focused on the biotechnology sector, Dermata Therapeutics presents a reasonable investment alternative.
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Reviewed by Raphi Shpitalnik
Dermata Therapeutics currently has $1.62 million in liabilities. To assess the company's asset utilization, we can examine the profit generated for each dollar of reported assets. Dermata Therapeutics demonstrates a negative asset utilization rate of -0.77%, indicating a loss of $0.007744 for every dollar of assets held. This inadequate asset utilization suggests that the company is not effectively managing its assets. In summary, Dermata Therapeutics' asset utilization reflects its struggles to generate profit from its investments.
Primary Takeaways
Investing in Dermata Therapeutics (NASDAQ: DRMA) presents a compelling leverage opportunity, especially following its impressive price surge of over 29%. With a Jensen Alpha of 0.92, the stock demonstrates strong risk-adjusted performance, suggesting that it has the potential to outperform the market despite its current challenges. Additionally, the company's total stockholder equity stands at 6.4M, indicating a solid foundation for future growth. Given these factors, investors may find this an opportune moment to consider adding DRMA to their portfolios.Dermata Therapeutics financial leverage ratio helps determine the effect of debt on the overall profitability of the company. It measures the total debt position of Dermata Therapeutics, including all of Dermata Therapeutics's outstanding debt obligations, and compares it with the equity. In simple terms, the high financial leverage means the cost of production, together with running the business day-to-day, is high, whereas, lower financial leverage implies lower fixed cost investment in the business and generally considered by investors to be a good sign. So if creditors own a majority of Dermata Therapeutics assets, the company is considered highly leveraged. Understanding the composition and structure of overall Dermata Therapeutics debt and outstanding corporate bonds gives a good idea of how risky the capital structure of a business is and if it is worth investing in it. Please read more on our technical analysis page.Watch out for price decline
Please consider monitoring Dermata Therapeutics on a daily basis if you are holding a position in it. Dermata Therapeutics is trading at a penny-stock level, and the possibility of delisting is much higher compared to other stocks. However, just because the stock is trading under one dollar, does not mean it will be marked for deletion. Most exchanges require public instruments, such as Dermata Therapeutics stock to be traded above the $1 level to remain listed. If Dermata Therapeutics stock price falls below $1 for 30 consecutive trading days, the exchange can delist it. Once the company reaches this point, they will be sent an initial price violation notice directly from an exchange.
Understanding Dermata Total Debt
Dermata Therapeutics liabilities are broken down into two parts on the balance sheet. These are short-term (or current) obligations and long-term debt. Dermata Therapeutics has to fulfill its short-term liabilities in this reporting year and should be no more than 12 months old. Long-term debt, on the other hand, is anything beyond the 12-month payment timeframe. Common short-term liabilities found on Dermata Therapeutics balance sheet include debt obligations and money owed to different Dermata Therapeutics vendors, workers, and loan providers. Below is the chart of Dermata main long-term debt accounts currently reported on its balance sheet. You can use Dermata Therapeutics financial leverage analysis tool to get a better grip on understanding its financial positionHow important is Dermata Therapeutics's Liquidity
Dermata Therapeutics financial leverage refers to using borrowed capital as a funding source to finance Dermata Therapeutics ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Dermata Therapeutics financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Financial leverage can amplify the potential profits to Dermata Therapeutics' owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if the firm cannot cover its debt costs. The degree of Dermata Therapeutics' financial leverage can be measured in several ways, including by ratios such as the debt-to-equity ratio (total debt / total equity), equity multiplier (total assets / total equity), or the debt ratio (total debt / total assets). Please check the breakdown between Dermata Therapeutics's total debt and its cash.
Breaking it down
The current bullish price patterns experienced by current Dermata Therapeutics shareholders could raise concerns from investors as the firm is trading at a share price of 3.22 on very low momentum in volume. The company management teams have been very successful in rebalancing the firm assets at opportune times to take advantage of market volatility in July. The stock standard deviation of daily returns for 90 days investing horizon is currently 16.93. The very high volatility is mostly attributed to the latest market swings and not very good earnings reports from some of the Dermata Therapeutics partners.
In the world of finance, the saying "buy low, sell high" often rings true, and Dermata Therapeutics (NASDAQ: DRMA) may present a compelling opportunity for investors. Despite recent market headwinds, the stock surged over 29%, driven by a robust current ratio of 8.07X, indicating strong liquidity and the ability to cover short-term liabilities of $1.6 million. With total cash from operating activities showing a loss of $6.4 million, the company is still well-positioned with $7.4 million in cash and short-term investments, suggesting potential for recovery. Furthermore, the stock's target price of $10 implies a significant upside of 17.27%, making it a strong buy for those willing to navigate the inherent risks in the biotechnology sector. As the company continues to innovate, investors may find that Dermata Therapeutics is a promising addition to their portfolios..
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