Arrowhead Pharmaceuticals, Inc. (ARWR) Fundamental Analysis: Bull vs. Bear Case

ARWR

Arrowhead Pharmaceuticals, Inc.

Fundamental data last updated:June 5, 2026

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company profile

SECTOR

Healthcare

industry

Biotechnology

Exchange

NASDAQ

County of HQ

US

Next Earnings Date

08/06/2026

Business Summary

Arrowhead Pharmaceuticals, Inc. develops medicines for the treatment of intractable diseases in the United States. The company's products in pipeline includes ARO-AAT, a RNA interference (RNAi) therapeutic candidate that is in Phase II clinical trial for the treatment of liver diseases associated with alpha-1 antitrypsin deficiency; ARO-APOC3, which is in phase 2b and one phase 3 clinical trial to treat hypertriglyceridemia; ARO-ANG3 that is in Phase 2b clinical trial to reduce production of angiopoietin-like protein 3; ARO-HSD, which is in Phase 1/2a clinical trial to treat liver diseases; ARO-ENaC, which is in a Phase 1/2a clinical trial to reduce production of the epithelial sodium channel alpha subunit in the airways of the lung; ARO-C3 for the treatment of complement-mediated disease that is in Phase 1/2a clinical trial; ARO-Lung2 for the treatment of chronic obstructive pulmonary disorder; ARO-DUX4 for the treatment of facioscapulohumeral muscular dystrophy; ARO-XDH to treat uncontrolled gout; ARO-COV for the treatment of COVID-19 and other pulmonary-borne pathogens; and ARO-HIF2, which is in phase 1b clinical trial to treat clear cell renal cell carcinoma. It is also involved in the development of JNJ-3989, a subcutaneously administered RNAi therapeutic candidate to treat chronic hepatitis B virus infection; Olpasiran to reduce the production of apolipoprotein A; and ARO-AMG1 for treating genetically validated cardiovascular targets. Arrowhead Pharmaceuticals, Inc. has a license and research collaboration agreement with Janssen Pharmaceuticals, Inc. to develop ARO-JNJ1, ARO-JNJ2, and ARO-JNJ3 RNAi therapeutics for liver-expressed targets; and license and research collaboration agreement with Takeda Pharmaceuticals U.S.A., Inc. to develop RNAi therapeutic candidate as a treatment for liver disease. Arrowhead Pharmaceuticals, Inc. was incorporated in 1989 and is headquartered in Pasadena, California.

VALUATION

P/E

-36.65

Market Cap ($M USD)

$10.91B

Forward P/E

31.39 PEG

0.14 PRICE TO SALES

17.54 PRICE TO BOOK

17.96 EV / EBITDA

-89.93

5-Year Average P/E

Free Cash Flow Yield

-0.47%

DCF Value

$-99.61

Graham Number

N/A

Price to FCF

-214.42

EV to FCF

-237.71

Earnings Yield

-2.73%

FCF Yield

-0.47%

DIVIDEND

Yield

0.00%

Annual Payout

$0.00

Payout Ratio

0.00%

Consecutive Years of Dividend Growth

5-Year Dividend Growth Rate

Financial Health & Profitability

Earnings Per Share

-$2.11

Next Year EPS Growth Estimate

$2.47

Next Year Revenue Growth Estimate

$159.28B

Return on Equity (ROE)

-55.45%

FREE CASH FLOW

Operating Margin

-35.67%

Debt-to-Equity

0.79 Piotroski F-Score

3 Altman Z-Score

3.79 Return on Invested Capital (ROIC)

-11.25%

Current Ratio

6.23 Quick Ratio

6.23 Net Debt to EBITDA

-8.81

Interest Coverage

-2.40

Gross Profit margin

100.00%

FCF PER SHARE

$-0.36

REVENUE PER SHARE

$4.37

Gainseekers Quantitative Analysis

Summary

Arrowhead Pharmaceuticals presents a perplexing valuation scenario. Despite a negative DCF value, the market has priced the stock significantly above this metric, suggesting high expectations for future growth. The Forward P/E of 25.48 indicates optimism, yet the negative Earnings Yield and ROIC raise red flags about current profitability. However, the Altman Z-score of 3.42 suggests a relatively stable financial footing, mitigating some concerns about financial distress. The market seems to be betting on a turnaround, banking on the estimated EPS growth next year.

AI Exposure / Tech Reliance

In the rapidly evolving biotechnology sector, Arrowhead Pharmaceuticals is well-positioned to leverage AI advancements. The company's focus on innovative drug development aligns with the industry's shift towards precision medicine and data-driven research. This adaptability could enhance its competitive edge in a tech-driven future.

The Bull Case

For the optimistic investor, Arrowhead offers a compelling growth narrative. The staggering sales growth projection of 169,128% next year is a testament to its potential market capture. Despite a low Piotroski F-Score of 3, the company's strong Current Ratio of 6.23 indicates robust liquidity. The high Gross Profit Margin of 98.98% suggests significant pricing power, which could translate into improved capital efficiency as the company scales.

The Bear Case

However, the stock is not without its pitfalls. The Price/Book ratio of 17.28 and Price/Sales of 16.46 highlight a potentially overvalued position, especially given the negative EPS and ROIC. The negative Free Cash Flow Yield and Price to FCF ratio underscore cash flow challenges, raising concerns about sustainability. Trading close to its 52-week high, the stock appears technically overextended, suggesting limited upside without substantial execution improvements.

Market Sentiment & Smart Money

Short Interest %

Analyst Consensus

Buy

Average Analyst Price Target

$83.56

Institutional Ownership %

1-Year Beta

1.29 Insider Buying % (6 Mo)

Distance to 52-Week High

6.22%

Distance to 52-Week Low

81.53%

EARNINGS SURPRISE %

21.19%

50-DAY SMA

$69.44

200-DAY SMA

$54.04

⚠️ Financial Disclaimer:
This content is for informational purposes only and is not financial advice. Information may be delayed or inaccurate. We may earn a commission from partner links.