Investment Thesis
Arrowhead Pharmaceuticals demonstrates exceptional revenue growth (+23258% YoY) with positive net income of $30.8M and strong liquidity (3.38x current ratio), indicating successful commercialization or major milestone. However, the dramatic YoY revenue surge masks concerning operational efficiency issues, with net income declining 105.4% YoY despite higher revenues, and weak free cash flow conversion (4.3% FCF margin) suggests cash generation challenges.
ARWR Strengths
- Exceptional revenue growth of 23,258% YoY indicating major commercial breakthrough or significant milestone achievement
- Strong balance sheet with $201.6M cash, minimal debt ($1.0M long-term), and 0.00x debt-to-equity ratio providing financial flexibility
- Robust liquidity position with 3.38x current and quick ratios, indicating strong ability to meet short-term obligations
- Positive operating margin of 15.5% and net margin of 11.7% demonstrating profitability in latest period
ARWR Risks
- Net income declined 105.4% YoY despite massive revenue growth, signaling deteriorating operational leverage and cost control issues
- Very weak free cash flow margin of 4.3% indicates majority of revenue is not converting to cash, raising sustainability concerns
- Extremely volatile YoY comparisons suggest potential one-time revenue event, milestone payment, or accounting treatment change rather than sustainable business momentum
- Low ROE of 5.4% and ROA of 1.9% indicate inefficient asset utilization and poor returns on shareholder capital
- Operating cash flow of only $13.5M against $264M revenue suggests significant working capital management issues or non-cash revenue recognition
Key Metrics to Watch
- Recurring revenue quality and sustainability - determine if 23,258% growth reflects genuine ongoing business or one-time milestone
- Free cash flow conversion and operating cash flow trend - critical to assess if company can sustain operations and fund R&D
- Gross margin when disclosed - currently unavailable but essential to understand product profitability and manufacturing efficiency
- R&D spending levels and pipeline progress - crucial for pharmaceutical company to justify investment thesis
- Debt trajectory and covenant compliance - monitor for potential dilution or financing needs given weak cash generation
ARWR Financial Metrics
ARWR Profitability Ratios
ARWR Balance Sheet & Liquidity
ARWR 5-Year Financial Trend
5-Year Trend Summary: ARROWHEAD PHARMACEUTICALS, INC.'s revenue has grown significantly by 391% over the 5-year period, indicating strong business expansion. The most recent EPS of $-1.92 indicates the company is currently unprofitable.
ARWR Growth Metrics (YoY)
ARWR Quarterly Performance
| Quarter | Revenue | Net Income | EPS |
|---|---|---|---|
| Q1 2026 | $2.5M | $30.8M | $0.22 |
| Q3 2025 | N/A | $22.1M | $0.17 |
| Q2 2025 | N/A | -$125.3M | $-1.02 |
| Q1 2025 | $2.5M | -$132.9M | $-1.24 |
| Q3 2024 | N/A | -$95.6M | $-0.90 |
| Q2 2024 | N/A | $7.4M | $0.07 |
| Q1 2024 | $3.6M | -$41.3M | $-0.39 |
| Q3 2023 | $15.8M | -$41.3M | $-0.68 |
Data sourced from SEC EDGAR 10-Q quarterly filings. Figures may represent quarterly or cumulative values.
ARWR Capital Allocation
ARWR SEC Filings
Access official SEC EDGAR filings for ARROWHEAD PHARMACEUTICALS, INC. (CIK: 0000879407)