Arrowhead Pharmaceuticals Inc. Common Stock (ARWR)

FairStock Score: 55/100 — STEADY

Key Financials

Strengths

• Generates $171 million in annual free cash flow (1.6% yield on market cap)
• High return on equity of 75.5% demonstrating efficient capital deployment
• Altman Z-Score of 5.6 confirms minimal bankruptcy risk and strong solvency
• Revenue growth of 10461.3% demonstrates strong top-line momentum

Concerns

• Trades significantly above Graham Number ($12) with negative 521% margin of safety—limited downside protection

AI Analysis

Arrowhead Pharmaceuticals Inc. Common Stock is a mid-cap healthcare company valued at $10.6 billion. The business generates $1.1 billion in annual revenue with a 2.8% net margin and $171 million in free cash flow. From a quality standpoint, Arrowhead shows Altman Z-Score of 5.6 confirms fortress-level solvency and extraordinary 76% return on equity. On valuation, the stock is commanding a steep 46.5x multiple, with trades far above its Graham Number ($12) with no margin of safety. Growth dynamics show revenue growing at 10461.3% and profit growth of 117.8%. Our composite FairStock Score of 55/100 reflects mixed fundamentals overall. Investors should weigh the business quality against the current price and their own margin of safety requirements.

Bull Case

Arrowhead's 10461% revenue growth trajectory could accelerate as it captures additional market share in the healthcare sector. With $171 million in annual free cash flow (1.6% yield), management has ample capital for buybacks, dividends, or accretive acquisitions.

Bear Case

At 47x earnings, any growth disappointment triggers rapid multiple compression—a 20% earnings miss plus multiple contraction to 20x implies 40%+ downside. Regulatory changes, input cost inflation, or demand normalization represent underappreciated risks that could materially impact forward estimates.

Data from SEC filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer