Technical analysis of Oncobiologics Inc. (NASDAQ:ONS)’s metrics


Oncobiologics, Inc. (NASDAQ:ONS) today announced that it closed the sale of the remaining $1.65 million senior secured notes and warrants to purchase 379,500 shares of its common stock under its previously announced Note and Warrant Purchase Agreement with existing investors, bringing the total amount issued to an aggregate of $10.0 million senior secured notes and warrants to purchase an aggregate of 2.3 million shares.

We are going to take a close look at Oncobiologics Inc. (NASDAQ:ONS) today to get a better sense of the company and its current status, as well as the opportunity it may offer for prospective investors. Today’s focus will be a fundamental evaluation of the stock from top to bottom.

As such, let’s start with the top line: Revenue trends.

Last quarter, the company saw its overall sales move to $303,141 in total revenues. That represents an overall change in revenues, on a quarterly year/year basis, of -2.28%. If we translate that into sequential terms, the company saw sales decline by 0% from quarter to quarter.

It?s important to closely track the top line data. There’s no better way to measure the end market?s reception of a company?s products. But no one truly wins without bottom line success, which is what we need to look at next.

Oncobiologics Inc. (NASDAQ:ONS) is intriguing when broken down to its core data. The cost of selling goods last quarter was $-, yielding a gross basic income of $-. For shareholders, given the total diluted outstanding shares of 23.8M, this means an overall earnings per share of $(0.38). Note, this compares with a consensus analyst forecast of $-0.52 in earnings per share for its next fiscal quarterly report.

Given that data, we now turn to a more thorough glance across analyst expectations for the company going forward.

At present, analysts hold a consensus average recommendation of Overweight. This is based on a total of 2. While we don’t suggest taking analyst recommendations as face value plans for action in a portfolio, we do think it is important to note where consensus is on a stock to understand what basic assumptions are perhaps already discounted into market pricing of shares of the stock.

As far as price targets, analysts currently have an average target on shares of at $7.00. In addition, if we turn to next year, we see estimates of a fiscal year forecast to bring about -2.61 in total earnings per share. On a median price to earnings ratio basis, that outlook adds up to a valuation of $9,999 times earnings.

At this point, we?ve taken a thorough look at this company from top to bottom, and gotten a sense of what analysts are expecting. But underneath it all, when push comes to shove, companies make it through tough times on balance sheet strength. With that in mind, we should take a look under the hood here.

As the reader is no doubt aware, for any company, balance sheet health sits at the heart of the company’s capacity to stand up to the demands and obligations incurred by normal and contingent operations, which in turn lies at the core of a company’s ability to retain the faith of investors in the marketplace. For Oncobiologics Inc. (NASDAQ: ONS), the company presently holds about $81,049 in cash in the coffers. That cash is balanced against about $12.14M in total current liabilities.

It’s important to consider both a static and dynamic picture, particularly where debt levels are concerned. This means, we need to take into account any trends. In this case, the company?s debt has been $growing. The company also has $17.46M in total assets, balanced by $44.31M in total liabilities, which suggests where this story might go under adverse economic or financial conditions.

As far as cash flows, the company saw a free cash flow last quarter of $(4.15M), representing a quarterly net change in cash of $(2M). On a net operating level, the company saw about $(4.11M) in cash flow.

Let’s take a look at the technical analysis.

The Barchart Technical Opinion rating is a 100% Sell with a Strongest short term outlook on maintaining the current direction. Longer term, the trend strength is Maximum. Long term indicators fully support a continuation of the trend. The market is in highly oversold territory. Beware of a trend reversal.

We will update the interesting story of Oncobiologics Inc. (NASDAQ: ONS) as new events transpire.