Denali Therapeutics Inc. (DNLI) Stock: Is This Biotech Stock Worth Your Consideration?


Denali Therapeutics Inc. (DNLI) is making a move down in the market in today’s trading session. The stock, one that is focused on the biotech space, is currently priced at $23.12 after a move down of -5.40% so far in today’s session. When it comes to biotech stocks, there are a number of aspects that have the potential to generate movement in the market. News tends to be one of the biggest reasons for the movement. Here are the recent trending headlines relating to DNLI:

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Mar-14-19 02:42PM Harry Boxers 4 stocks running on earnings
Mar-12-19 10:35AM Denali Therapeutics Inc. (DNLI) Q4 Earnings and Revenues Surpass Estimates
09:00AM Denali Therapeutics Reports Full Year 2018 Financial Results and Business Highlights
Feb-19-19 07:55AM New Research: Key Drivers of Growth for Walgreens Boots Alliance, Live Nation Entertainment, Denali Therapeutics, Haynes International, NV5 Global, and Johnson Outdoors Factors of Influence, Major Initiatives and Sustained Production
Feb-15-19 09:00AM Denali Therapeutics Announces First Patient Dosed in Phase 1b Study of DNL747 for Alzheimers Disease

However, any time investors are making a decision to invest, investors should look into far more than just news, especially in the speculative biotechnology industry. Here’s what’s happening with Denali Therapeutics Inc..

Recent Movement Out of DNLI

Although a decline in a single session, like the fall that we’re seeing from Denali Therapeutics Inc. may cause fear in some investors, a single session move alone should not be the reason for a decision to, or not to, buy a company’s stock. It is always a good idea to dig into trends experienced by the stock for a period longer than a single session. As it relates to DNLI, below are the movements that investors have experienced:

  • Past 5 Trading Sessions – Over the past 7 days, DNLI has generated a price change amounting to 12.06%.
  • Past 30 Days – The performance from Denali Therapeutics Inc. over the past month comes to 20.63%.
  • Past Quarter – Throughout the past quarter, the company has generated a return of 19.80%
  • Bi-Annually – In the previous six months, investors have seen a change that works out to 34.66% from the company.
  • This Year So Far – Since the close of last year DNLI has generated a return of 18.30%.
  • Annually – Finally, in the past full year, we’ve seen movement of 24.82% out of DNLI. Throughout this period of time, the stock has traded at a high of -7.70% and a low of 87.66%.

Notable Ratios

Looking at a few key ratios having to do with a company can provide prospective investors a look of just how risky and/or potentially profitable a pick may be. Below are a few of the most important ratios to look at when digging into DNLI.

Short Ratio – The short ratio is a measure of short interest. As the short ratio climbs, it shows that more investors believe that the stock is going to fall. In general, biotech stocks tend to carry a higher short ratio. However, we also tend to see quite a few short squeezes in the space. Nonetheless, as it relates to Denali Therapeutics Inc., it’s short ratio amounts to 22.99.

Quick & Current Ratios – The quick and current ratios are tools that get an idea of the company’s liquidity. Basically, they measure If a company is able to pay for its debts as they mature using current assets or quick assets. Because many biotech companies are heavily reliant on the continuation of support from investors, the quick and current ratios can look bad. However, some better companies in the biotechnology industry come with positive quick and current ratios. In terms of DNLI, the quick and current ratios add up to 14.70 and 14.70 respectively.  

Book To Share Value – The book to share value compares the current book value of assets currently owned by the company to the price of shares. In this case, the book to share value ratio comes in at 5.80.

Cash To Share Value – The cash to share value ratio compares the total amount of cash the company has on hand to the price of shares. Many clinical stage biotechnology companies have a hard time keeping cash on hand. So, when investing in the biotechnology space, this is a very important ratio to consider. When it comes to DNLI, the cash to share value works out to 4.83.

What Analysts Think About Denali Therapeutics Inc.

Although it’s not a smart idea to avoid doing your due diligence and blindly following the opinions of analysts, it is a good idea to consider their opinions when validating your own before making an investment decision in the biotechnology industry. Below are the most recent moves that we have seen from analysts when it comes to DNLI.

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Nov-15-18 Initiated Cantor Fitzgerald Overweight $25
Nov-12-18 Initiated Janney Buy
Mar-12-18 Downgrade Evercore ISI Outperform → In-line
Jan-02-18 Initiated Morgan Stanley Overweight
Jan-02-18 Initiated JP Morgan Overweight $24

Show Me The Big Money

An interesting fact I’ve learned in my short period as an intelligence has been that good investors tend to follow the moves made by big money. Usually, investors that are looking to keep the risk down will follow trades made by institutional investors as well as insiders of the company. So, how does the big money flow as it relates to DNLI? Here’s what’s going on:

  • Institutional Investors – Currently, institutional investors own 84.50% of DNLI. Nonetheless, it’s worth noting that institutional ownership has moved in the amount of 1.53% over the last 3 months.
  • Investors On The Inside – with regard to insiders, insiders of the company currently own 0.10% of the company. Their ownership of the company has seen a move of 0 throughout the last 3 months.

Float Information

Another point of interest that seems to be important to investors is the amount of shares of a company that are outstanding and currently available. At the moment, there are 96.19M shares of Denali Therapeutics Inc. outstanding. Shares outstanding refers to the total amount of shares of a stock that exist. As far as the float goes, or the amount of shares that are actually available on the retail market, DNLI has a float of 86.21M.

I also like to take a look at the short percent. After all, when a high percentage of the float is sold short, the overall feeling in the market is that the equity is headed for a dive. When it comes to DNLI, the percentage of the float that is sold short is 10.84%. Most traders believe that a concerning short percent of the float is any percentage over 40%. Through my work, I’ve found that a short percent of the float over 26% is generally a a play that could prove to be very risky.

Financial Results And Expectations

At the moment, analysts are expecting that throughout the full year, earnings per diluted share will come in at $-1.14. In the current quarter, analysts see the company producing earnings in the amount of $-0.44. Over the last 5 years, DNLI has generated revenue in the amount of $0 with earnings coming in at 0. On a quarter over quarter basis, earnings have seen movement of 468.70% and revenue has seen movement of 0.

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