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About Sensei Therapeutics

So this is a first for us at MacroHint.

No, really, this is the first penny stock we have ever laid our eyes on and seriously considered analyzing before and today just happens to be the day we are actually cracking open the financials of this specialty therapeutics company and keen on gaining a lot more in terms of familiarity with Sensei and what it does, how it makes money, and all of that other fun stuff prospective shareholders like to look at and should frankly know.

First and foremost, Sensei Therapeutics is headquartered in Rockville, Maryland and is described as being a clinical-stage immunotherapy company, particularly focusing on the field of oncology or in discovering and manufacturing drugs that aim to help cancer patients and those that broadly struggle with infectious diseases.

Of course, we are certainly strong proponents of eradicating cancer and the effects thereof once and for all, however, as potential shareholders in this company, we aren’t thrilled with the term “clinical-stage,” as this heavily implies that this company has yet to generate any revenue, which, we understand, the road to approval for one drug in itself can be a winding, exhausting and expensive road, however, when there are other younger, niche drug firms out there with millions, if not billions in terms of revenue generated, those can obviously appear to be a bit less risky.

However, this very well might not actually be the case with Sensei and it might have some revenue to offer, so we will definitely keep an open mind but correspondingly objective lens as it pertains to this company and its prospects.

It can also be noted that like many other biotechnology, therapeutics or pharmaceutical companies, Sensei is likely recession proof by nature given that many of its innovations (once kicked down the pipeline) are going to be sought after and needed by all too many suffering people, willing to pay for a drug and/or treatment regardless of their personal financial situation, for better or for worse.

This is an objectively common theme among operators within the therapeutics and biotechnology sectors.

At any rate, this was a brief introduction to Sensei Therapeutics and here is a lot more on the company’s core financials and other relevant figures that might just help us in determining whether or not this company’s stock is worth considering as an investment for now and, you guessed it, for later.

Sensei’s stock financials

First and foremost, Sensei Therapeutics has the lowest market capitalization we have ever seen on MacroHint thus, far, measured at $14.36 million, which, for the novice investor may initially seem like a lot, however, nearly every single company we have analyzed thus far maintains a market capitalization well into the billions.

This is simply something that we consider to be noteworthy yet it hardly has any bearing on our opinion on the company or its stock (NASDAQ: SNSE), as it is just a relative measure of how large this company is, measured by multiplying its share price by the number of its outstanding shares.

With that, it can also be found that Sensei’s stock is trading at a share price of a whopping $0.54, again, the absolute lowest share price we have ever seen on this website, not to mention that this company also doesn’t have a readily available price-to-earnings (P/E) ratio nor does it issue a dividend to its shareholders at the moment, which is far from uncommon for younger biotechnology and pharmaceutical companies as these younger businesses practically survive or die from their innovation, and as is the case with basically any other disruptive industry, innovation costs a pretty penny and thus a company such as Sensei needs to absorb and retain as much cash as it possibly can so as to put it directly back into its developments and current and emerging business segments.

Moving right along to the state of this company’s balance sheet, Sensei’s executive team is in charge of and responsible for just about $118.4 million in terms of total assets as well as just south of $15 million in terms of total liabilities, which is most certainly an attractive total asset-total liability breakdown and overall structure, as this company apparently has plenty of asset coverage and isn’t going out of business anytime soon, at least, upon initial review, due to being overleveraged (i.e., maintaining too much in the amount of total liabilities relative to the total assets on its books).

With respect to the company’s income statement, Sensei’s total annual revenues are at unprecedented levels, as we have quite literally never seen anything like this before.

This being said, in the interest of breaking the suspense, Sensei’s recent total annual revenues  over each of the last handful of years since 2018, stand at a whopping $0, and that’s year-over-year (YOY).

I guess this is just a byproduct of being a clinical-stage oncology firm, however it still indisputably adds a layer of uncertainty that we certainly weren’t looking forward to, however, one could frame it in such a way that the risk-reward profile is quite sensible.

At any rate, however, with zero dollars in revenues over the last handful of years, we aren’t exactly thrilled nor enthused to dive headfirst into potentially buying this company’s stock (NASDAQ: SNSE).

This being the case, it isn’t all that surprising to also find that according to the company’s cash flow statement, Sensei has been draining cash both on a net income and total cash from operations basis (also referencing since 2018), more than likely through the capital it is burning through in order to develop, manufacture and sell (upon completing a variety of relatively lengthy approval processes, of course) its drugs, which is completely understandable and sensei-ble (get it?), but, if this company doesn’t receive more cash or cash equivalents and simultaneously continues burning through cash at a rather exponential rate, it feels as though this company could be over before it even formally starts, at least from a basic revenue generation standpoint.

Needless to say, while we fully sympathize with the fact that drug development and approval processes can take an inordinately long period of time, a prospective shareholder looking for some sort of revenue in any form isn’t a lot to ask for in a publicly traded company, all things considered, as there are plenty of other therapeutics companies with consistent-to-growing streams of revenue.

Sensei’s stock fundamentals 

Obviously, this section of the analysis is going to not be as lengthy as it usually is given that a company with no revenues subsequently cannot have any sort of profit margin since it hasn’t yet sold anything, thus there is no trailing twelve month (TTM) net profit margin available for Sensei during the time of this publication.

Additionally, the company’s listed TTM returns on assets and investment(s) (as displayed on TD Ameritrade’s platform) are in rather disappointing, but at this juncture in time, expected positions, as, for example, the company’s TTM return on assets is listed as -39.73% to the industry’s relative average of -4.43%, and until this company begins turning over some revenue to combat its cash flow burn, this isn’t likely to change anytime soon, sadly.

Should you buy Sensei Therapeutics stock?

Thankfully, as far as relative valuations and risk-reward profiles go, Sensei is in a fine position, from our vantage point.

More specifically, it makes sense that this is a penny stock, as it has no revenues to display since 2018, it is burning through an exponentially copious amount of cash on a year-over-year basis and its return metrics are far from confidence invoking at the time of this publication.

Nevertheless, for the risk-seeking cowboys of the investment space, looking to perhaps wet their beaks with an oncology firm that is in the process of developing a pipeline that is incredibly difficult to reasonably say whether or not will generate revenue in the years, decades and centuries to come, this company’s stock (NASDAQ: SNSE) might just be perfect for you and your portfolio.

All things considered, however, we are not seeking a thrill right now and therefore until further notice and/or developments as well as approvals, we deem it most appropriate to offer this company’s stock a “sell” rating.

DISCLAIMER: This analysis of the aforementioned stock security is in no way to be construed, understood, or seen as formal, professional, or any other form of investment advice. We are simply expressing our opinions regarding a publicly traded entity.