XOMA Royalty Corporation Depositary Shares Rep Series B 8.375% Cumulative Preferred Stock (XOMAO)

FairStock Score: 52/100 — MIXED

Key Financials

AI Analysis

AI-generated, general educational analysis — not personal investment advice.

As a value investor, I start by asking what I am buying. XOMAO is not common equity; it is a depositary share tied to XOMA’s Series B 8.375% cumulative preferred stock. At the 2026-07-21 close of $25.00, the yield is 8.38%, and the 52-week range of $24.86–$26.40 shows the market is pricing it close to a fixed-income-like instrument. The underlying business is a royalty aggregator with 14 employees, collecting milestone and royalty payments. That can be a decent asset if contracts are diversified, but the figures given show lumpiness, not steady compounding. In the quarter labeled 2026-Q1, revenue was only $310,000 while net income was $4.5 million—a 1440.32% margin, which tells me earnings are not coming from ordinary revenue. Trailing free cash flow was negative $13.9 million. The data provided show revenue growth of -92.82% and profit growth of 88.64%, though the periods are not specified. Debt/equity is 1.10, ROCE is only 1.28%, and the Piotroski F-score is 5/9. ROE of 34.23% looks high but may be distorted by small equity or one-off items. On valuation, the FairStock P/E is 25.00, P/B is 3.21, and the Graham Number is $14.60, giving a margin of safety of -71.23% against the $25.00 close. Those common-equity metrics make the price look expensive, though a preferred share should be judged by dividend coverage and its cumulative claim. The 8.38% yield is attractive if cash flows cover it; negative free cash flow and shrinking revenue make that uncertain. I would want more history—only 0 years of filed results for a Lynch category. The preferred may pay you to wait, but the business quality does not offer a wide margin of safety.

In plain English: XOMA Royalty Corporation buys rights to future drug royalty and milestone payments; it is a tiny company with 14 employees. In the latest reported quarter, revenue was only $310,000 but net income was $4.5 million, and cash after expenses over the last twelve months was negative $13.9 million, so the business looks uneven. The preferred shares trade at $25.00 and pay an 8.375% cumulative dividend; the price looks roughly fair for that fixed dividend, though the company’s numbers leave little room for error.

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Data as of 2026-07-21 close · note generated 2026-10-15 · model deepseek-flash

Fundamentals from company filings and market-data providers; prices are end-of-day, not real-time. AI-generated analysis is general and educational — not personal investment advice. Scoring methodology · Score test · Disclaimer