Keros Therapeutics Inc. Common Stock (KROS)

FairStock Score: 85/100 — HIGH CONVICTION

Key Financials

Strengths

• Generates $66 million in annual free cash flow (18.9% yield on market cap)
• Solid return on equity of 19.9% above cost of capital
• Conservative balance sheet with debt-to-equity of just 0.06, providing financial flexibility
• Altman Z-Score of 4.8 confirms minimal bankruptcy risk and strong solvency
• FairStock composite score of 85/100 places it in the top tier across value, quality, and momentum factors

Concerns

• Currently unprofitable—sustained losses could lead to dilutive capital raises or balance sheet deterioration
• Revenue declining at 87.3% year-over-year signals potential demand weakness or market share loss
• Weak Piotroski F-Score of 1/9 suggests deteriorating financial quality across multiple dimensions

AI Analysis

Keros Therapeutics Inc. Common Stock is a micro-cap healthcare company valued at $350 million. Revenue stands at $244 million, though the company is currently unprofitable. From a quality standpoint, Keros shows weak Piotroski F-Score of 1/9 signaling deteriorating fundamentals and healthy Altman Z-Score of 4.8. On valuation, the stock is deeply undervalued on a P/E basis at 5.0x, with offers a 59% margin of safety vs Graham Number of $28. Growth dynamics show revenue growing at -87.3% and profit growth of 49.0%. Our composite FairStock Score of 85/100 reflects strong fundamentals overall. This combination of reasonable valuation, solid returns, and conservative leverage makes it worth a closer look for value-oriented portfolios.

Bull Case

The market underappreciates Keros's consistent 20% ROE at just 5x earnings—a re-rating toward sector peers could unlock 30-50% upside. With $66 million in annual free cash flow (18.9% yield), management has ample capital for buybacks, dividends, or accretive acquisitions.

Bear Case

Without a clear path to profitability, continued cash burn forces either dilutive equity raises or debt accumulation that destroys shareholder value. 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