ASRT

We rate Assertio Holdings, Inc. (ASRT) as a Buy with a composite score of 71.4/100 at a current price of $11.97. The stock scores above average across the majority of our six quantitative factors and ranks #73 out of 7,333 stocks in our universe, reflecting a favorable risk-reward profile.

The rating is primarily driven by strength in momentum (98th percentile) and value (98th percentile), which together account for the majority of the composite score. Offsetting weakness in investment (23th percentile) and stability (40th percentile) tempers our overall conviction. We assign a Wide Moat rating (70/100), High uncertainty, and Poor capital allocation.

Key items to watch: balance sheet deleveraging progress; sustainability of the current growth rate; the path to profitability. Any material change in these dynamics could warrant a reassessment of our rating. The moat trend is stable, which suggests the competitive landscape is stable for now.

Assertio Holdings, Inc. holds a lower-quartile position (#39 of 50) within the Manufacturing sector, based on our composite quantitative scoring across quality, value, momentum, and stability factors. The composite score of 71.4/100 places it at rank #73 in our full 7,333-stock universe. At $85M in market capitalization, Assertio Holdings, Inc. is a small-cap player in the Manufacturing space, which limits certain scale advantages but may allow for more agile strategic execution.

The near-term outlook is constructive, with revenue growing at 59% and momentum in the 98th percentile confirming positive market sentiment and institutional accumulation. The combination of strong top-line growth and favorable price dynamics suggests the company is executing well on its growth strategy. Investment factor at the 23th percentile indicates reinvestment patterns that investors should monitor for sustainability.

The margin cascade tells an important story: gross margins of 72% (+29.5pp vs sector) narrow to operating margins of -16% (-17.5pp vs sector) and net margins of -23.5%, yielding a gross-to-net conversion rate of -33%. The significant margin erosion from gross to net suggests elevated operating expenses, high interest costs, or other structural drags that warrant monitoring.

At a current price of $11.97, Assertio Holdings, Inc. appears undervalued relative to its fundamentals. Our value factor score of 98/100 reflects a composite assessment across multiple valuation metrics including price-to-earnings, price-to-book, EV/EBITDA, and price-to-sales ratios relative to both sector peers and the broader market. The stock screens as attractively priced on a majority of these measures, suggesting the market may be underappreciating the underlying fundamentals.

The stock currently trades at a P/E of 100.3x (a 351% premium to the sector median of 22.3x), EV/EBITDA of 1.6x (discounted to peers), P/B of 0.7x, P/S of 0.6x. The above-sector P/E multiple suggests the market is pricing in superior growth or quality, which our analysis partially supports given strong quality metrics.

We assign a High uncertainty rating to Assertio Holdings, Inc.. Key risk factors include significant leverage (202% debt-to-equity), current negative profitability (net margin -23.5%), low beta of 0.53 — while defensive, this may indicate limited upside participation in bull markets. The wide range of potential outcomes widens our fair value estimate and increases the possibility of permanent capital impairment. Investors considering this name should size positions accordingly and demand a meaningful margin of safety before initiating.

Specific risk factors that inform our assessment include: significant leverage (202% debt-to-equity); current negative profitability (net margin -23.5%); low beta of 0.53 — while defensive, this may indicate limited upside participation in bull markets; elevated valuation multiple (P/E 100.3x) that leaves limited margin for error. Each of these factors independently widens the distribution of potential outcomes, and in combination they create a risk profile that demands careful position sizing. The stability factor at the 40th percentile and quality factor at the 80th percentile provide a quantitative summary of the overall risk landscape.

Key risk mitigants include: healthy gross margins of 72% provide a buffer against cost pressures. These factors partially offset the identified risks and provide downside protection in adverse scenarios. On balance, the risk-reward profile warrants caution and disciplined position management.

We rate Assertio Holdings, Inc.'s capital allocation as Poor. Key concerns include low returns on equity (-20.2%), elevated leverage (202% D/E), negative profitability, weak asset returns (ROA -6.7%). Exemplary capital allocators generate ROE above 20% and maintain conservative leverage — Assertio Holdings, Inc. significantly underperforms these benchmarks, raising questions about management's ability to create shareholder value.

Investors should scrutinize management's reinvestment decisions and balance sheet trajectory before committing capital. Poor capital allocation often compounds over time: overlevered balance sheets limit strategic flexibility, while low returns on capital destroy shareholder value. We would need to see sustained improvement in profitability metrics and balance sheet discipline before considering an upgrade.

In summary, Assertio Holdings, Inc. receives a Buy rating with a composite score of 71.4/100 (rank #73 of 7,333). Our quantitative framework assigns a Wide Moat (70/100, trend: stable), High uncertainty, and Poor capital allocation. The average factor score across quality, value, momentum, stability, and investment is 68/100.

Our analysis supports a constructive view on Assertio Holdings, Inc.. The combination of a wide competitive moat, high uncertainty, and poor capital allocation creates a risk-reward profile that favors accumulation at current levels. We recommend investors consider adding this name to portfolios aligned with the stock's risk profile.