CAPR

We rate CAPRICOR THERAPEUTICS, INC. (CAPR) as a Reduce with a composite score of 45.9/100 at a current price of $28.45. The quantitative profile shows weakness across multiple dimensions, suggesting limited upside potential and elevated risk of underperformance relative to peers over the next 12 months.

The rating is primarily driven by strength in momentum (84th percentile) and investment (36th percentile), which together account for the majority of the composite score. Offsetting weakness in stability (18th percentile) and quality (23th percentile) tempers our overall conviction. We assign a No Moat rating (16/100), Very High uncertainty, and Poor capital allocation.

Key items to watch: whether strong momentum is fundamentally supported by revenue trends; the path to profitability; valuation compression risk if growth disappoints. Any material change in these dynamics could warrant a reassessment of our rating. The moat trend is narrowing, which raises the risk of a future downgrade if the trend persists.

CAPRICOR 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 45.9/100 places it at rank #2647 in our full 7,333-stock universe. At $330M in market capitalization, CAPRICOR THERAPEUTICS, INC. is a small-cap player in the Manufacturing space, which limits certain scale advantages but may allow for more agile strategic execution.

Despite positive momentum (84th percentile), revenue contraction of -100% creates a divergence between price action and fundamental trajectory. This divergence suggests either that the market is looking through near-term weakness or that technical factors are temporarily inflating the stock. Investors should assess whether the revenue decline reflects cyclical weakness or structural challenges.

Available margin data shows operating margins of -575%. 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 $28.45, CAPRICOR THERAPEUTICS, INC. is trading at a premium to fundamental value. Our value factor score of 28/100 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 P/B of 18.5x, P/S of 685.8x. We evaluate these multiples in the context of both absolute levels and sector-relative positioning to form our valuation view.

We assign a Very High uncertainty rating to CAPRICOR THERAPEUTICS, INC.. The stock exhibits multiple compounding risk factors: elevated market sensitivity (beta of 1.52), current negative profitability (net margin -555.2%), below-average price stability (18th percentile). The extreme uncertainty around future cash flows makes precise valuation difficult, and the range of outcomes is exceptionally wide. Only investors with high risk tolerance and extended time horizons should consider this name.

Specific risk factors that inform our assessment include: elevated market sensitivity (beta of 1.52); current negative profitability (net margin -555.2%); below-average price stability (18th percentile); weak quality scores (23th 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 18th percentile and quality factor at the 23th percentile provide a quantitative summary of the overall risk landscape.

We identify limited risk mitigants at this time, which contributes to our very high uncertainty assessment. Investors should monitor for improvement in balance sheet metrics, margin stability, and business predictability that could warrant a downgrade in our risk assessment over time.

We rate CAPRICOR THERAPEUTICS, INC.'s capital allocation as Poor. Key concerns include low returns on equity (-104.3%), negative profitability, weak asset returns (ROA -69.2%). Exemplary capital allocators generate ROE above 20% and maintain conservative leverage — CAPRICOR THERAPEUTICS, 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, CAPRICOR THERAPEUTICS, INC. receives a Reduce rating with a composite score of 45.9/100 (rank #2647 of 7,333). Our quantitative framework assigns a No Moat (16/100, trend: narrowing), Very High uncertainty, and Poor capital allocation. The average factor score across quality, value, momentum, stability, and investment is 38/100.

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