All You Need To Know About Amicus Therapeutics Inc’s (NASDAQ:FOLD) Financial Health
Small-caps and large-caps are wildly popular among investors, however, mid-cap stocks, such as Amicus Therapeutics Inc (NASDAQ:FOLD), with a market capitalization of US$2.89b, rarely draw their attention from the investing community. However, generally ignored mid-caps have historically delivered better risk-adjusted returns than the two other categories of stocks. This article will examine FOLD’s financial liquidity and debt levels to get an idea of whether the company can deal with cyclical downturns and maintain funds to accommodate strategic spending for future growth. Note that this information is centred entirely on financial health and is a top-level understanding, so I encourage you to look further into FOLD here. See our latest analysis for Amicus Therapeutics
How does FOLD’s operating cash flow stack up against its debt?
FOLD’s debt levels surged from US$154.75m to US$164.47m over the last 12 months , which comprises of short- and long-term debt. With this growth in debt, FOLD currently has US$358.56m remaining in cash and short-term investments , ready to deploy into the business. Moving onto cash from operations, its small level of operating cash flow means calculating cash-to-debt wouldn’t be too useful, though these low levels of cash means that operational efficiency is worth a look. For this article’s sake, I won’t be looking at this today, but you can examine some of FOLD’s operating efficiency ratios such as ROA here.
Does FOLD’s liquid assets cover its short-term commitments?
Looking at FOLD’s most recent US$70.04m liabilities, it seems that the business has been able to meet these commitments with a current assets level of US$391.97m, leading to a 5.6x current account ratio. Though, anything above 3x is considered high and could mean that FOLD has too much idle capital in low-earning investments.
Is FOLD’s debt level acceptable?
With debt at 31.97% of equity, FOLD may be thought of as appropriately levered. This range is considered safe as FOLD is not taking on too much debt obligation, which may be constraining for future growth. Risk around debt is very low for FOLD, and the company also has the ability and headroom to increase debt if needed going forward.
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FOLD’s low debt is also met with low coverage. This indicates room for improvement as its cash flow covers less than a quarter of its borrowings, which means its operating efficiency could be better. However, the company exhibits an ability to meet its near term obligations should an adverse event occur. I admit this is a fairly basic analysis for FOLD’s financial health. Other important fundamentals need to be considered alongside. I recommend you continue to research Amicus Therapeutics to get a better picture of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for FOLD’s future growth? Take a look at our free research report of analyst consensus for FOLD’s outlook.
Valuation: What is FOLD worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether FOLD is currently mispriced by the market.
Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.
