Radius Health, Inc. (RDUS) | Investment Case

1. Company Snapshot

1.a. Company Description

Radius Health, Inc., a biopharmaceutical company, focuses on addressing unmet medical needs in the areas of bone health, orphan diseases, and oncology.The company's commercial product is TYMLOS, an abaloparatide injection for the treatment of postmenopausal women with osteoporosis.It is also developing abaloparatide-SC, which is in Phase III clinical trials for the treatment of osteoporosis in men; abaloparatide-TD, a transdermal system that is in Phase III clinical trials to treat postmenopausal women with osteoporosis; Elacestrant (RAD1901), a selective estrogen receptor degrader, which is in Phase III clinical trials for the treatment of hormone-receptor positive breast cancer; and RAD011, which is in Phase II clinical trials for treatment of hyperphagia related to Prader-Willi syndrome.

The company has collaborations and license agreements with 3M Company; Ipsen Pharma SAS; Teijin Limited; Berlin-Chemie AG; Eisai Co. Ltd.; and Duke University.Radius Health, Inc.was founded in 2003 and is headquartered in Boston, Massachusetts.

As of August 10, 2022, Radius Health, Inc.was taken private.

Show Full description

1.b. Last Insights on RDUS

Radius Health, Inc.'s recent performance was driven by a proposed acquisition by Toyota Tsusho America, Inc. for $30.00 per share in cash, representing a 115% premium to the company's closing share price. The deal is expected to accelerate investment in future growth and strengthen the company's resiliency. Additionally, the company reported positive operating and free cash flow in its Q2 earnings release, with ferrous and finished steel sales volumes up year-over-year. The Radius Board also declared a quarterly dividend, further enhancing shareholder value.

1.c. Company Highlights

Last Price	30
Change Percentage	0.00%
Open	30.0
Previous Close	30
Market Cap ( Millions)	842
Volume	947697
Year High	30.04
Year Low	10.57
M A 50	29.56
M A 200	21.36

FCF Yield	-1.53%
Dividend Yield	2.50%
ROE	-18.17%
Debt / Equity	111.28%
Net Debt / EBIDTA	2087.07%
Price To Book	1.64
Price Earnings Ratio	-8.34
Price To FCF	-65.24
Price To sales	0.3
EV / EBITDA	51.76

2. Radius Recycling First Quarter 2025 Earnings Review

Radius Recycling delivered a mixed performance in its first quarter 2025 earnings report, with financial results reflecting both operational resilience and ongoing market headwinds. The company reported an adjusted loss of $1.33 per share, driven by unfavorable tax impacts, and achieved nearly breakeven EBITDA, signaling stabilization in its core operations. Despite challenges in the ferrous markets, where demand remained soft, the recycled metals segment showed promising signs of recovery, benefiting from cost reductions and stronger nonferrous demand. However, finished steel volumes declined due to maintenance outages and weaker demand, underscoring the broader macroeconomic challenges faced by the industry. Capital expenditures for the quarter totaled $12 million, with plans to invest $60 million in total for fiscal 2025, focusing on growth and sustainability initiatives. Additionally, the company expects $35 million in proceeds from asset monetization, which could provide near-term liquidity support.

Publication Date: Mar -14

                                    📋 Highlights
                                    Adjusted EPS and EBITDA Performance::
                                                Adjusted EPS was a loss of $1.33 due to tax impacts, while EBITDA was nearly breakeven, reflecting stable operating results despite market challenges.
Recycled Metals Business Improvement::
                                                The recycled metals segment showed improved performance, driven by cost reductions and stronger nonferrous demand, though ferrous markets remained soft.
Capital Expenditures and Asset Monetization::
                                                Capital expenditures for the quarter were $12 million, with total fiscal 2025 CapEx projected at $60 million. The company also expects $35 million from asset monetization.
Sustainability and Emission Reductions::
                                                The company achieved a 30% reduction in Scope 1 and 2 emissions since 2019, with 100% carbon-free electricity usage, driven by investments in advanced emissions control systems.
Strategic Initiatives and Growth::
                                                Key initiatives include advanced metal recovery technologies, which are expected to generate $10 EBITDA per ferrous ton, and the 3PR service line, which contributed 10% of recycled metals volumes in FY2024.

                                

Strategic Initiatives and Sustainability Progress

Radius Recycling emphasized its commitment to innovation and sustainability, highlighting key strategic initiatives that aim to drive long-term growth. The advanced metal recovery technologies are expected to contribute meaningfully to margins, with potential EBITDA improvements of $10 per ferrous ton. The 3PR service line, which now accounts for 10% of recycled metals volumes, has been a key driver of operational efficiency. The company also underscored its sustainability achievements, including a 30% reduction in Scope 1 and 2 emissions since 2019, and 100% carbon-free electricity usage. Tamara Lundgren, the company’s executive, noted that these accomplishments were driven by employee dedication and investments in cutting-edge technologies. “Our team has been instrumental in navigating these challenges while maintaining a strong focus on sustainability and operational excellence,” Lundgren stated during the call.

Operational Efficiency and Market Outlook

Despite the challenging market environment, Radius Recycling demonstrated operational resilience, particularly in its recycled metals business. The company’s ability to reduce SG&A expenses by 6% year-over-year reflects its commitment to cost management and efficiency. Looking ahead, the company remains optimistic about the outlook for recycled metals, with expectations of a potential recovery in manufacturing and steel markets. However, near-term challenges, including global steel overproduction, particularly from China, could weigh on pricing and demand. Management emphasized its focus on strategic priorities, including capital allocation, asset monetization, and improving cash flow, to navigate these headwinds.

Valuation Considerations

From a valuation perspective, Radius Recycling’s shares appear to reflect a discounted view of its growth potential, with a price-to-sales ratio of 0.27 and a price-to-book ratio of 0.86, indicating undervaluation relative to peers. The company’s free cash flow yield of 1.26% suggests limited near-term cash generation, while its return on equity of -2.77% highlights operational challenges. However, the enterprise value-to-EBITDA ratio of 29.84 may indicate investor skepticism about the company’s ability to sustain growth and profitability in the near term. Despite these metrics, the company’s focus on sustainability, innovation, and strategic cost management positions it well to capitalize on long-term trends in the recycled metals market.

3. NewsRoom

Radius Recycling (RDUS) Reports Q3 Loss, Beats Revenue Estimates

Jul -01

Source: zacks.com

RDUS Investors Have the Opportunity to Join Investigation of Radius Recycling, Inc. with the Schall Law Firm

Apr -28

Source: prnewswire.com

RDUS Investors Have the Opportunity to Join Investigation of Radius Recycling, Inc. with the Schall Law Firm

Apr -28

Source: businesswire.com

Radius Recycling (RDUS) Reports Q2 Loss, Tops Revenue Estimates

Apr -04

Source: zacks.com

Radius Recycling Reports Second Quarter Fiscal 2025 Financial Results

Apr -04

Source: globenewswire.com

RADIUS RECYCLING INVESTOR ALERT by the Former Attorney General of Louisiana: Kahn Swick & Foti, LLC Investigates Adequacy of Price and Process in Proposed Sale of Radius Recycling, Inc. - RDUS

Mar -14

Source: businesswire.com

$HAREHOLDER ALERT: The M&A Class Action Firm Investigates the Merger of Radius Recycling, Inc. - RDUS

Mar -14

Source: prnewswire.com

RDUS Stock Alert: Halper Sadeh LLC Is Investigating Whether the Sale of Radius Recycling, Inc. Is Fair to Shareholders

Mar -13

Source: businesswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (11.21%)

6. Segments

Ferrous

Expected Growth: 10.3%

Increasing prevalence of iron deficiency anemia, growing demand for convenient oral therapies, and Radius Health's strong pipeline position Ferrous for significant market growth.

Nonferrous

Expected Growth: 12.1%

Increasing demand for osteoporosis diagnosis, growing elderly population, and advancements in radiolabeled diagnostic agents drive the growth of Nonferrous market.

Steel

Expected Growth: 12.1%

Increasing osteoporosis prevalence, aging population, and growing demand for osteoporosis treatment options drive the growth of the Steel market. Radius Health's innovative oral medication, increasing osteocalcin to treat osteoporosis, is poised to capture a significant share of the market.

Retail and Other

Expected Growth: 12.3%

Strong demand for TYMLOS, increasing adoption in retail pharmacies, and expansion into new channels drive growth in the Retail and Other segment.

7. Detailed Products

TYMLOS

A prescription medication used to treat osteoporosis in postmenopausal women and men at high risk for fracture.

RAD011

An investigational, once-daily, oral growth hormone receptor antagonist for the treatment of growth hormone deficiency.

RAD1901

An investigational, selective estrogen receptor degrader (SERD) for the treatment of hormone receptor-positive breast cancer.

Abaloparatide

A synthetic peptide that is used to treat osteoporosis in postmenopausal women.

8. Radius Health, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Radius Health, Inc. has a moderate threat of substitutes due to the availability of alternative treatments for osteoporosis and oncology. However, the company's focus on innovative therapies and its strong pipeline may mitigate this threat.

Bargaining Power Of Customers

Radius Health, Inc. has a low bargaining power of customers due to the specialized nature of its products and the lack of alternative options for patients. This gives the company pricing power and flexibility in its commercial strategy.

Bargaining Power Of Suppliers

Radius Health, Inc. has a moderate bargaining power of suppliers due to its reliance on third-party manufacturers and suppliers for its products. However, the company's strong relationships with its suppliers and its vertical integration efforts may mitigate this risk.

Threat Of New Entrants

Radius Health, Inc. faces a high threat of new entrants due to the attractiveness of the osteoporosis and oncology markets. New entrants may disrupt the market with innovative products or business models, posing a threat to Radius Health's market share.

Intensity Of Rivalry

Radius Health, Inc. operates in a highly competitive market with established players and new entrants vying for market share. The company's ability to differentiate its products and maintain a strong commercial strategy will be crucial in this competitive landscape.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	28.69%
Debt Cost	5.64%
Equity Weight	71.31%
Equity Cost	12.12%
WACC	10.26%
Leverage	40.22%

11. Quality Control: Radius Health, Inc. passed 3 out of 9 key points

Strong Liquidity

Low Debt

Strong Interest Coverage

Healthy Cash Flow

Operating Inefficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Pacira BioSciences

A-Score: 5.3/10

Value: 8.1

Growth: 4.6

Quality: 4.3

Yield: 0.0

Momentum: 9.5

Volatility: 5.0

1-Year Total Return ->

Phibro Animal Health

A-Score: 4.9/10

Value: 2.7

Growth: 5.2

Quality: 4.2

Yield: 4.0

Momentum: 9.5

Volatility: 4.0

1-Year Total Return ->

Radius Health

A-Score: 4.9/10

Value: 6.8

Growth: 3.4

Quality: 1.4

Yield: 5.0

Momentum: 9.0

Volatility: 3.7

1-Year Total Return ->

OptiNose

A-Score: 4.4/10

Value: 7.4

Growth: 4.4

Quality: 5.1

Yield: 0.0

Momentum: 5.0

Volatility: 4.7

1-Year Total Return ->

ProPhase Labs

A-Score: 3.3/10

Value: 7.6

Growth: 0.3

Quality: 3.8

Yield: 3.0

Momentum: 5.0

Volatility: 0.3

1-Year Total Return ->

SCYNEXIS

A-Score: 3.2/10

Value: 7.8

Growth: 5.4

Quality: 4.6

Yield: 0.0

Momentum: 0.5

Volatility: 1.0

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

29.53%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

10.26%

Radius Health, Inc. - US7504692077

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on RDUS

1.c. Company Highlights

Higher Yield

Lower Quality

Higher Growth

Earnings Beats

Weak Momentum

Revenues Beats

Cheaper

Earnings Miss

Revenues Miss

Average Growth

Stable Momentum

Strong Momentum

2. Radius Recycling First Quarter 2025 Earnings Review

Strategic Initiatives and Sustainability Progress

Operational Efficiency and Market Outlook

Valuation Considerations

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (11.21%)

6. Segments

Ferrous

Expected Growth: 10.3%

Nonferrous

Expected Growth: 12.1%

Steel

Expected Growth: 12.1%

Retail and Other

Expected Growth: 12.3%

7. Detailed Products

TYMLOS

RAD011

RAD1901

Abaloparatide

8. Radius Health, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: Radius Health, Inc. passed 3 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

30.0$

Current Price

30$

Potential

-0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA