BDTX

We rate Black Diamond Therapeutics, Inc. (BDTX) as Avoid with a composite score of 34.1/100 at a current price of $2.56. The stock falls in the bottom quintile of our universe across key quantitative factors, and the multi-factor weakness suggests a high probability of continued underperformance.

The rating is primarily driven by strength in stability (39th percentile) and investment (39th percentile), which together account for the majority of the composite score. Offsetting weakness in quality (29th percentile) and value (31th percentile) tempers our overall conviction. We assign a No Moat rating (33/100), High uncertainty, and Exemplary capital allocation.

Key items to watch: momentum to confirm whether the current price trend has legs. 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.

Black Diamond Therapeutics, Inc. holds a top-quartile position (#0 of 50) within the Manufacturing sector, based on our composite quantitative scoring across quality, value, momentum, and stability factors. The composite score of 34.1/100 places it at rank #4198 in our full 7,333-stock universe. At $216M in market capitalization, Black Diamond Therapeutics, Inc. is a small-cap player in the Manufacturing space, which limits certain scale advantages but may allow for more agile strategic execution.

Momentum indicators (35th percentile) suggest caution regarding the near-term price trend. Revenue growth data is unavailable, limiting our ability to confirm whether momentum is fundamentally supported.

Available margin data shows operating margins of 78%. Incomplete margin data limits our ability to fully assess the cost structure and margin trajectory, though the available metrics provide a partial view of operating efficiency.

At a current price of $2.56, Black Diamond Therapeutics, Inc. is trading at a premium to fundamental value. Our value factor score of 31/100 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 premium valuation implies the market is pricing in significant future growth or quality improvements that are not yet fully reflected in current fundamentals.

The stock currently trades at a P/E of 6.0x (a 73% discount to the sector median of 22.3x), EV/EBITDA of 11.1x (near the sector median), P/B of 1.1x, P/S of 1.9x. The below-sector P/E suggests possible undervaluation or the market pricing in near-term headwinds.

We assign a High uncertainty rating to Black Diamond Therapeutics, Inc.. Key risk factors include elevated market sensitivity (beta of 1.55), below-average price stability (39th percentile), weak quality scores (29th percentile). 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: elevated market sensitivity (beta of 1.55); below-average price stability (39th percentile); weak quality scores (29th percentile). 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 39th percentile and quality factor at the 29th percentile provide a quantitative summary of the overall risk landscape.

Key risk mitigants include: conservative leverage (25% D/E) limits balance sheet risk. 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 Black Diamond Therapeutics, Inc.'s capital allocation as Exemplary. Management demonstrates a strong track record of balancing reinvestment with shareholder returns, evidenced by returns on equity of 17.4%, disciplined leverage (25% D/E), best-in-class net margins of 80.8%. Exemplary allocators typically generate returns on equity above 20% while maintaining debt-to-equity below 50% — Black Diamond Therapeutics, Inc. approaches this high bar.

The balance sheet remains conservatively managed, providing financial flexibility for opportunistic investments while maintaining a margin of safety for shareholders. We note that the combination of 13.9% return on assets and controlled leverage suggests management is deploying capital at rates well above the cost of capital — the hallmark of exemplary stewardship.

In summary, Black Diamond Therapeutics, Inc. receives a Avoid rating with a composite score of 34.1/100 (rank #4198 of 7,333). Our quantitative framework assigns a No Moat (33/100, trend: stable), High uncertainty, and Exemplary capital allocation. The average factor score across quality, value, momentum, stability, and investment is 35/100.

Our analysis does not support a constructive view on Black Diamond Therapeutics, Inc. at this time. The combination of limited competitive advantages, high uncertainty, and exemplary capital allocation suggests unfavorable risk-reward at current levels. We recommend investors avoid new positions and existing holders consider reducing exposure.