Collegium Pharmaceutical Inc. Common Stock (COLL)

FairStock Score: 71/100 — STEADY

Key Financials

Strengths

• Generates $322 million in annual free cash flow (30.2% yield on market cap)
• High return on equity of 23.7% demonstrating efficient capital deployment
• FairStock composite score of 71/100 places it in the top tier across value, quality, and momentum factors

Concerns

• Trades significantly above Graham Number ($19) with negative 71% margin of safety—limited downside protection
• High leverage at 3.10x debt-to-equity increases financial risk and interest expense burden
• Altman Z-Score of 0.8 places it in the financial distress zone—elevated bankruptcy risk

AI Analysis

Collegium Pharmaceutical Inc. Common Stock is a micro-cap healthcare company valued at $1.1 billion. The business generates $781 million in annual revenue with a 2.2% net margin and $322 million in free cash flow. From a quality standpoint, Collegium shows solid Piotroski F-Score of 6/9 and distressed Altman Z-Score of 0.8 warrants caution. On valuation, the stock is reasonably priced at 18.7x earnings, with trades above its Graham Number with a negative 71% margin. Growth dynamics show revenue growing at 12.9% and profit growth of 35.3%. Our composite FairStock Score of 71/100 reflects above-average fundamentals overall. Investors should weigh the business quality against the current price and their own margin of safety requirements.

Bull Case

Improving fundamentals and sector tailwinds could drive meaningful earnings growth, compressing the effective multiple for patient investors. With $322 million in annual free cash flow (30.2% yield), management has ample capital for buybacks, dividends, or accretive acquisitions.

Bear Case

Elevated leverage at 3.1x D/E means rising interest rates or revenue weakness could strain debt covenants and force asset sales at distressed prices. 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