Krystal Biotech Inc. Common Stock (KRYS)

FairStock Score: 52/100 — MIXED

Key Financials

Strengths

• Generates $94 million in annual free cash flow (1.2% yield on market cap)
• Solid return on equity of 18.9% above cost of capital
• Conservative balance sheet with debt-to-equity of just 0.01, providing financial flexibility
• Altman Z-Score of 43.2 confirms minimal bankruptcy risk and strong solvency
• Healthy net profit margin of 13.2% showing consistent profitability

Concerns

• Trades significantly above Graham Number ($80) with negative 239% margin of safety—limited downside protection

AI Analysis

Krystal Biotech Inc. Common Stock is a small-cap healthcare company valued at $8.0 billion. The business generates $389 million in annual revenue with a 13.2% net margin and $94 million in free cash flow. From a quality standpoint, Krystal shows Altman Z-Score of 43.2 confirms fortress-level solvency and adequate 19% ROE. On valuation, the stock is trading at a premium 39.1x earnings, with trades far above its Graham Number ($80) with no margin of safety. Growth dynamics show revenue growing at 17.5% and profit growth of 13.0%. Our composite FairStock Score of 52/100 reflects mixed fundamentals overall. Investors should weigh the business quality against the current price and their own margin of safety requirements.

Bull Case

Krystal's 18% revenue growth trajectory could accelerate as it captures additional market share in the healthcare sector. With $94 million in annual free cash flow (1.2% yield), management has ample capital for buybacks, dividends, or accretive acquisitions.

Bear Case

At 39x 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