ARROWHEAD PHARMACEUTICALS, INC. (ARWR) Stock Analysis
ARROWHEAD PHARMACEUTICALS, INC.
Our tested checks disagree with each other, so the answer depends on something further down the page rather than on any one measure.
What each rating means, in numbers
Can it survive? — Safe. Safer than 77% of the companies we cover, judged on the warning signs that came before companies that really did fail.
Business quality — Middling. Passes 5 of the 8 health checks we can measure — things like making a profit, turning it into cash, and not piling on debt. Across 131,000 company-quarters the weakest scorers went on to fail at 5.4% against 1.4% for the strongest, in every era and all twelve sectors.
How wild is the price? — Wild. The share price swings about 54% in a typical year, which puts it in the above average. Out of every 100 companies that swung like this, about 3.7 went bankrupt within the year. Across the three periods we tested that ran from 0.9% to 5.7%.
What "tested" means here, and why there is no score out of 100
Tested means the read was measured against what actually happened afterwards, on a history that keeps the companies that were later delisted, using only figures that had been filed on the day they are used. Survival was ranked on companies that really did fail. What an owner keeps was tested across the universe from 2011 to 2025.
The full record of everything we have tested is on the research pages.
Which benchmark. Over the period we tested, the median listed company returned +5.8% a year while the S&P 500 returned about +13.9% — the index is weighted by size and was carried by a handful of enormous winners. So "beats the index" and "beats the other companies you could have bought" are different questions. Where a read says it picks better companies, it means the second one. None of these gets you an index fund's return, and we would rather say that than imply otherwise.
The quality read is the strongest thing we have tested: 131,000 company-quarters across 5,300 companies, where the weakest scorers went on to fail at 5.4% against 1.4% for the strongest, holding in every era and all twelve sectors. It still says less likely to break, not likely to beat the market — every band in that study lost to the index at the median, because the median listed company does.
Each read is shown on its own rather than merged into a single score, so you can see which part is strong and which is weak instead of taking an average on trust.
▾ What goes into the smart-money reading
Contributions (weight × component score) sum to the total. This near-term score now includes fundamental health (leverage, FCF trend). It excludes the Altman Z score, whose retained-earnings input this filer does not report separately. See the Financial Health section for the full balance-sheet read.
📍 Where to start on this page, and what to look at first
How to read ARWR (pre-profit growth)
This company is reinvesting instead of generating profit, so a standard DCF cannot price it. The useful question is whether the growth the market is paying for is achievable — and whether the company can fund itself until then.
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Reverse-DCF — the growth the price demands ↓
It shows exactly how fast the business must grow to justify today's price. Compare that to what comparable companies have actually achieved.
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Cash runway ↓
Can it reach profitability before it has to raise money and dilute shareholders?
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Interactive calculator ↓
Set your own growth + margin assumptions and see what the business would be worth if you are right.
Standard DCF doesn't fit ARWR well — but that's expected for this kind of business. The Rule of 40 (Pre-Profit Growth) Lens below uses the metrics actually used by analysts who value pharmaceuticals. Reverse DCF + Football Field also work as cross-checks.
Who owns ARWR, and how it moves
From the SEC's own filings: every fund manager over $100M reports its holdings each quarter, and every officer and director reports theirs. Each point is what was public at the time.
499 institutions reported holding it at the latest quarter-end.
Safer than 78% of the stocks we cover
What this rating means, and what it does not
What this rank is — Safe. Safer than 78% of the companies we cover. Out of every 100 companies ranked here, about <0.1% went bankrupt within the year, against 0.6% for the average company we cover. The rank comes from a model trained on every US filing since 2012, including 823 companies that really did fail, and scored each year by a version that had not seen that year.
What it is not — Not a trade. We tested shorting these names and buying puts, spreads, straddles and condors on them at real option prices, 2010-2025. Every version lost money: the market already prices the distress and the survivors squeeze. A high rank is a reason to read the filings and to size for a total loss, not a reason to bet against the company. A low rank says the balance sheet is calm, not that the price is sensible.
▾ The numbers, the logic, and why not to trade on it
The logic. A model trained on every US filing since 2012 — including 823 companies that went bankrupt or stopped trading under a dollar — ranks each covered stock by its chance of failing in the next year, from its latest filing, price history and credit conditions. The rank is a position among peers; the table is a count of what happened to stocks in each position, scored each year by a model that had not seen that year.
| Rank band | went bankrupt within 12 months | fell 80% or more (or failed) within 12 months | fell 50% or more (or failed) within 6 months |
|---|---|---|---|
| All covered stocks (average) | 0.59% | 4.21% | 8.51% |
| Healthcare (sector average) | 0.94% | 9.47% | 17.69% |
| riskiest 1% | 16.4% | 33.0% | 45.5% |
| next 2% (97-99) | 5.9% | 24.9% | 38.2% |
| next 2% (95-97) | 3.4% | 21.2% | 33.8% |
| next 5% (90-95) | 1.6% | 15.1% | 27.3% |
| next 15% (75-90) | 0.8% | 8.5% | 17.8% |
| next 25% (50-75) | 0.2% | 2.7% | 6.2% |
| safest half ← this stock | <0.1% | 0.5% | 2.1% |
Why not to trade on it. We tested shorting these names and buying puts, spreads, straddles and condors on them at real option prices, 2010–2025: every version lost money. The market already prices the distress, and the survivors squeeze. Use a high rank to read the filings and to size for a total loss — not to bet against the company. A low rank says the balance sheet is calm, not that the price is sensible.
Scored from the filing of 2026-05-08; table generated 2026-09-18. Within Healthcare: rank 8 of 100. Rough one-year odds for this stock alone: bankruptcy 0.1%, an 80% fall 2.1% (the model overstates the middle of the range). Altman Z here: 3.51; on the same data Altman caught 26% of bankruptcies in its riskiest 5%, this rank 59%.
▾ The logic, and why not to buy on it
The logic. Trained on 2,900 acquisitions since 2012, the model leans on size (small), age, retained earnings, asset growth, volatility and how many deals the sector has just seen. Announcement = the day the stock jumped, not the day the paperwork was filed.
| top 1% | 15.4% acquired within a year |
| next 2% (97-99) | 10.3% acquired within a year |
| next 2% (95-97) | 9.0% acquired within a year |
| next 5% (90-95) | 7.3% acquired within a year |
| next 15% (75-90) | 6.4% acquired within a year |
| next 25% (50-75) | 4.8% acquired within a year |
| bottom half ← this stock | 3.0% acquired within a year |
Why not to buy on it. A takeover paid a median +22% on the day — but even in the top band about 6 in 7 companies are not bought, and those lag. Buying the whole top list returned what the S&P 500 did (2012–2023), and adding "cheap" or "beaten-down" filters did not change that. Read it as context for a thesis you already have, never as the thesis.
What this rating means
What the rating says — Inside every range. The current price sits inside each method's range — roughly fair on this blended view.
What it does not say — Not a forecast. This shows where today's price sits against several different ways of valuing the business. Where the methods disagree, the spread itself is the useful part - it tells you how much the answer depends on which one you trust.
Football field: where does the price sit?
Different valuation methods produce different fair-value ranges depending on assumptions. Plotting them together lets you see at a glance whether the current price is reasonable across approaches, or only one specific lens.
Industry multiples sourced from: industry: Pharmaceuticals. See the Peer Basket section below for the peer comparison and its limited-comparables caveat.
How does ARWR stack up against its closest peers?
We take the 8 same-industry companies most similar to ARWR (similar size) and check what investors are paying for each dollar of their revenue (or profits). If ARWR is much more expensive on the same yardstick, that's a red flag — unless you have a specific reason it deserves a premium. For a leveraged business, EV/EBIT and FCF yield (both in the table) are usually more reliable than EV/Sales, because revenue multiples ignore differences in margins and debt.
▾ What's "EV / Sales" in plain English?
EV (Enterprise Value) = market cap + total debt − cash. It's "what you'd pay to buy the entire company outright" — you pay the market cap to shareholders and take over their debt, but you keep their cash. EV is fairer than market cap alone because it includes the debt the new owner inherits.
EV / Sales = EV ÷ annual revenue. So "2.5×" means investors pay $2.50 of enterprise value per $1 of yearly sales. Higher = market is paying more per dollar of sales (usually because they expect future growth or fat margins).
p25 / median / p75 are the 25th, 50th (middle), and 75th percentile of the peers' multiples. Half the peers fall between p25 and p75. The median (p50) is the typical peer — that's the benchmark we compare to.
| EV / SalesEV / Sales — For every $1 of yearly revenue, this is how many dollars investors pay to own the whole business (including debt). Why it matters: Works for pre-profit growth companies where P/E and FCF don't apply. The most apples-to-apples cross-company multiple because it ignores accounting choices. Reference: 1–3x for mature companies · 4–10x for software/SaaS · 10–20x for hypergrowth · >20x is rare and demanding Full explanation → |
6.5x / 9.8x / 11.5x |
Bold middle number = median peer. Half the peers trade above it, half below. Computed over 8 same-industry peers; implausible multiples excluded.
⚠️ Important caveat: peer multiples only work if the peers are genuinely comparable. Always check the peer list below — if the auto-picker grabbed micro-caps or unrelated businesses, the comparison is noise. A medical-device giant priced against tiny biotech startups won't produce a useful signal.
▾ View peer list (8)
| Ticker | Company | Industry | Mcap | EV/Sales | EV/GP | EV/EBIT | FCF Yield |
|---|---|---|---|---|---|---|---|
| RGC | Regencell Bioscience Holdings Ltd | Pharmaceuticals | $11.8B | — | — | — | — |
| SPRO | Spero Therapeutics, Inc. | Pharmaceuticals | $12.4B | 981.8x | — | 1,957.0x | 0.1% |
| TGTX | TG THERAPEUTICS, INC. | Pharmaceuticals | $5.8B | 9.8x | — | 49.1x | 10.6% |
| TVTX | Travere Therapeutics, Inc. | Pharmaceuticals | $5.6B | 11.5x | — | — | 4.6% |
| ERAS | Erasca, Inc. | Pharmaceuticals | $5.4B | — | — | — | — |
| XENE | Xenon Pharmaceuticals Inc. | Pharmaceuticals | $5.3B | 705.4x | — | — | 0.0% |
| VKTX | Viking Therapeutics, Inc. | Pharmaceuticals | $3.8B | — | — | — | — |
| CPRX | CATALYST PHARMACEUTICALS, INC. | Pharmaceuticals | $3.8B | 6.5x | — | 14.8x | 4.6% |
Quality & solvency checks
Cheap stocks can be cheap for a reason. These screens warn when a low valuation comes paired with structural fragility.
What these health ratings mean, in numbers
Business quality — Middling. Passes 5 of the 8 health checks we can measure — making a profit, turning it into cash, not piling on debt, not issuing shares. Across 131,000 company-quarters the weakest scorers went on to fail at 5.4% within a year against 1.4% for the strongest, and that held in every era and all twelve sectors. It says "less likely to break", not "likely to beat the market".
Why it matters: Cheap-looking stocks (low P/E or P/B) often have low Z-scores because the market knows the company is dying. Z-score warns you before you fall into a value trap.
Reference: > 3.0 = safe zone · 1.81–3.0 = grey zone · < 1.81 = distress zone
Full explanation →
We can't produce a trustworthy Altman Z here: retained earnings weren't separately reported in our data, so a core input would have to be fabricated. Rather than show a categorical "distress" verdict from an invented number, we mark it unavailable. Judge financial health from the leverage, cash position, and the measurable Piotroski checks instead.
▾ The checks — what passed, what didn't (and what we couldn't measure)
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✗ Positive net incomeNet income -$1.6M in FY2025.Why this matters: Does the company actually earn a profit? Sustained losses eventually force it to raise money — diluting you — or take on debt.
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✓ Positive operating cash flowOperating cash flow $179.6M (was -$462.9M the prior year).
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✓ Cash flow backs up reported profitOperating cash flow $179.6M vs net income -$1.6M.
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✓ Return on assets improvingReturn on assets -0.1% vs -52.6% a year ago.
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✓ Debt load (vs assets)The filing reports no interest-bearing debt in either year (total assets $1,385.3M).
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✗ Short-term liquidity (current ratio)Current ratio 4.86x vs 6.74x a year ago.Why this matters: The current ratio compares assets it can turn to cash within a year against bills due within a year. Below 1.0 means it may struggle to cover near-term obligations.
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✗ Share count (dilution)Share count rose 11.7% (119.8M → 133.8M year-over-year).Why this matters: Issuing lots of new shares splits the pie into more pieces, shrinking your slice. Stable or falling share count protects existing owners.
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· Pricing power (gross margin) (n/a — data not reported; not scored)
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✓ Sales per asset (asset turnover)Asset turnover 0.60x vs 0.00x a year ago.
Missing data is never counted as a pass or a fail — it's shown as n/a and excluded from the denominator. Each check compares the company against its own prior year.
What if you assume different inputs?
Here's where we land — and what happens if you change the assumptions. Drag the sliders to set your own Discount RateDiscount Rate — The annual return you demand for taking single-stock risk instead of buying a safe Treasury or index fund.
Why it matters: Higher discount rate = stricter valuation (a stock has to produce more cash to be worth holding). Lower = more generous.
Reference: 8–12% is standard · 9–10% matches S&P 500 historical return · Below 7% is illogical for single-stock risk
Full explanation → (the annual return you demand for single-stock risk) and terminal growth; the value updates live so you can see whether the stock looks cheaper or richer. The discount rate starts at 10.0%, the figure our model used for ARWR. Open Advanced to also change beta, growth and the rate path.
Note: no headline intrinsic value is published for this stock (the valuation is held for a data-quality reason — see the notes above). The calculator below is a what-if tool: the values it produces are your assumptions played out, not our estimate.
A full intrinsic value isn't shown for ARWR because the valuation is currently held for a data-quality reason (see the guardrail notes above). The reverse-DCF reading still works — it needs only the price and cash flow — but we won't publish a forward value until the underlying data passes our checks.
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⚙ Advanced — tinker with every input (beta, growth, rate path, margin → full intrinsic value)
A standard discounted cash flowDCF — Discounted Cash Flow — sums up all future cash a business will produce, adjusted for the fact that future dollars are worth less than dollars today.
Why it matters: It is the most fundamentally honest valuation method when applicable — but only works for companies with predictable, positive cash flow.
Reference: Best for: mature, profitable businesses. Fails for: pre-profit growth, banks, REITs.
Full explanation → (DCF) valuation is not meaningful for Arrowhead Pharmaceuticals due to its negative net income in the latest fiscal year and its cash-burning growth stage. Valuing this company would require detailed assumptions about its product pipeline success and future market penetration, which are highly speculative. Investors are likely betting on the potential of its RNAi therapeutics pipeline and future revenue growth, as indicated by its revenue growing at 56.5% per year over four years. The biggest risk to our assumptions is that the company's operating cash flow, while positive at $179.6 million, may not consistently generate sufficient free cash flowFree Cash Flow (FCF) — Operating cash flow minus capital spending: cash left after a company covers operating costs, taxes and interest and reinvests in the business — but BEFORE repaying debt principal or paying dividends. The cash actually available to investors.
Why it matters: A company can show big profits on paper while burning through cash. FCF is what actually fills the bank account.
Reference: Healthy mature businesses convert 8–15% of revenue into FCF · Growth companies often negative
Full explanation → to fund its extensive R&D and growth initiatives.
As of 3 days ago
Anatomy of a share
What you're buying per share. Bars are at the same scale so you can see the relative size of revenue, costs, cash flow, and debt — not just read them in a table.
What's free cash flow / what do these mean?
Revenue per share — how much the business earns from customers, divided by the number of shares outstanding. Top of the income statement.
Earnings per share — profit left after operating costs, interest, and taxes, per share. Two versions appear on this page and are not interchangeable: GAAP diluted EPS uses the company's weighted-average diluted share count during the reporting period (this is the "earnings" in "price-to-earnings"); net income per current share divides annual net income by today's share count. They differ whenever the share count has changed.
Owner-earnings free cash flow per share — the cash the business produces for shareholders. Savng's owner-earnings FCF subtracts capital expenditures and stock-based compensation from operating cash flow (SBC is a real dilution cost even though it's non-cash). This is deliberately more conservative than "standard" FCF, which subtracts only capital expenditures — so our figure is lower than the headline FCF you'll see elsewhere. FCF funds dividends, buybacks, debt repayment, and acquisitions; a company can report positive earnings yet negative FCF.
Debt per share — total interest-bearing borrowings divided by shares. High debt-per-share next to thin FCF-per-share is a fragility signal.
What you actually need to decide
Every stock price is a disagreement. Here's the single thing that must go right for the bulls, the single thing that breaks the thesis, and the concrete signposts to watch so you can update your view as real results arrive.
- Progress and results from ongoing clinical trials
- New collaboration or licensing agreements
- Regulatory milestones and approvals for pipeline candidates
The trend, in plain numbers (FY2024 → FY2025, latest reported)
Straight from the financial statements — no model, no opinion. For a small or unprofitable company, the direction of these numbers usually tells you more than any single valuation.
- Revenue grew +23,258% to $829.4M.
- Free cash flow turned positive at $93.5M.
- Still unprofitable at -$1.6M — loss narrowing.
Nothing was clearly worsening year-over-year.
Management & Leadership
Christopher Richard Anzalone serves as the Chief Executive Officer, with Daniel Joseph Apel as the Chief Financial Officer. James C Hamilton is the Chief Medical Officer, and Patrick O'Brien is the Chief Operating Officer. These executives lead the company's strategic direction and operational execution.
Chief Executive Officer
Chief Financial Officer
Chief Medical Officer
COO
What They Make
Arrowhead Pharmaceuticals develops and commercializes RNA interference (RNAi) therapeutics to treat diseases. Their primary payers are pharmaceutical partners through collaboration agreements and potentially healthcare systems or insurers upon product commercialization.
End Markets
Revenue Drivers
Why Is It Priced Like This?
Why Customers Pay
What we use instead: earnings (P/E, EV/EBIT), book value (P/B) — computed from the figures this company does report, shown in the sections below. Those numbers are unaffected by the missing cash-flow data.
The market's pricing for ARWR is primarily driven by expectations of future product pipeline success and the potential for significant revenue growth from its RNAi therapeutics. Despite negative net income, the company has positive operating cash flow of $179.6 million, suggesting investors are focused on its long-term growth prospects and the optionality embedded in its drug development programs rather than current profitability.
Business Model & Valuation
How They Make Money
The company funds its operations and R&D through cash and short-term investments of $226.5 million, and likely through equity raises given its growth stage and negative net income.
Free Cash Flow DCF
Owner-earnings FCF DCF: positive free cash flow (operating cash flow − capex − stock-based comp) in a sector suited for cash-flow-based valuation. FCF negative in 3/5 years. High P/FCF (99x) - market pricing significant growth.
Show advanced inputs
| Sector Default | 10.0% |
| Sector Default Source | Healthcare sector default |
| Best Estimate | 10.0% |
| Method | sector_default |
| Growth Basis | total |
What this model does NOT do: this is a consolidated owner-earnings FCF model. Standalone segment assumptions: none. It does not project its revenue segments independently; their combined effect is embedded in the historical revenue and cash-flow trend the model extrapolates. The calculator above can only approximate a segment's impact through the single consolidated growth rate — it cannot model any one line separately. For a true segment-level view, build a separate model from the company's segment disclosures.
Maturity & Competitive Position
Moat Signals
Revenue has been growing at 56.5% per year over four years, from $138 million to $829.4 million.
Geography & Markets
Arrowhead Pharmaceuticals is headquartered in the US and primarily conducts its research and development activities there. While specific geographic revenue mix is not available, its partnerships may extend its reach internationally.
Geographic Risks
Market Signals
These are timing signals, not value signals — they describe the stock's recent price behavior, not what the business is worth. Use them for the "the thesis looks good, but is now the moment?" question. Each tile below explains what it's saying.
Why it matters: Short-term contrarian indicator. Extreme readings often precede mean reversion, though not always.
Reference: 30–70 normal · >70 overbought · <30 oversold
Full explanation → (14)31.7NeutralMomentum is balanced — neither overbought nor oversold.
Why it matters: When the fast line crosses above the slow line, short-term momentum is turning up; below, turning down. A timing cue, not a value signal.
Reference: Line above signal = bullish momentum · below = bearish
Full explanation →BearishLine below signalThe fast trend is below the slow trend — short-term momentum is currently downward.
Technicals describe price, not the business. A great company can have a "bearish" tape (a buying chance) and a weak one a "bullish" tape (a trap). Pair these with the valuation and health sections above.
QUALITY
Data Quality & Risk Flags (6 notes — click to expand/collapse)
Guardrail Notes (6)
- Stock-based compensation equals 40% of pre-SBC free cash flow; FCF used here is net of SBC (a real shareholder-dilution cost), so it is lower than the headline GAAP cash-flow figure.
- Historical revenue growth is contaminated by likely acquisitions (2022, 2025: revenue jumped +76%/+23258% with a matching jump in share count). The reported 56.5%/yr CAGR treats those deals as organic growth, so we did NOT use it. Too few clean years remained to estimate organic growth from revenue, so the model fell back to its next-best source.
- Price is far above the model output - market may be pricing optionality, narrative catalysts, or margin expansion beyond what trailing cash flows support.
- Extreme valuation: the price is far above the model output for a non-cyclical — likely dominated by a data issue. The model value is suppressed.
- VALUATION HELD (EXTREME_MODEL_GAP): per-share values suppressed due to the model output failed plausibility checks.
- Extreme valuation gap (P/IV withheld — see the note above): result may be dominated by model assumptions, share count issues, or sector-specific dynamics. Treat as low confidence.
FINANCIALS
Financial Statements (5-year tables — click to expand)
From ARROWHEAD PHARMACEUTICALS, INC.'s SEC filings (EDGAR).
Income (5yr)
| Year | Revenue | Net Income | EPS |
|---|---|---|---|
| 2025 | 829.4M | -1.6M | $-0.01 |
| 2024 | 3.6M | -599.5M | $-5.00 |
| 2023 | 240.7M | -205.3M | $-1.92 |
| 2022 | 243.2M | -176.1M | $-1.67 |
| 2021 | 138.3M | -140.8M | $-1.36 |
Cash Flow (5yr)
| Year | Operating CF | CapEx | − SBC | Free Cash Flow |
|---|---|---|---|---|
| 2025 | 179.6M | 22.7M | 63.4M | 93.5M |
| 2024 | -462.9M | 141.5M | 74.0M | -678.3M |
| 2023 | -153.9M | 176.7M | 78.1M | -408.8M |
| 2022 | -136.1M | 52.8M | 120.9M | -309.8M |
| 2021 | 171.3M | 23.6M | 76.7M | 71.1M |
How we define FCF: operating cash flow − capital expenditure − stock-based compensation (owner-earnings basis — SBC is a real cost to shareholders even though it's non-cash). Latest year: 179.6M − 22.7M − 63.4M (stock-based comp) = 93.5M. This is the same owner-earnings FCF definition the valuation model uses.
Balance Sheet
| Total Assets | 1.4B |
| Total Liabilities | 881.9M |
| Equity | 466.1M |
Similar companies worth a look
Same sector and industry, similar fundamentals shape. Verify everything yourself — this list is computed mechanically and does not reflect our judgment about whether any of these are a good investment.