CHRS

We rate Coherus BioSciences, Inc. (CHRS) as a Reduce with a composite score of 42.4/100 at a current price of $1.67. 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 (75th percentile) and stability (35th percentile), which together account for the majority of the composite score. Offsetting weakness in investment (23th percentile) and quality (28th percentile) tempers our overall conviction. We assign a No Moat rating (38/100), Very High uncertainty, and Standard capital allocation.

Key items to watch: whether strong momentum is fundamentally supported by revenue trends; balance sheet deleveraging progress. Any material change in these dynamics could warrant a reassessment of our rating. The moat trend is widening, which provides additional comfort in the durability of the competitive position.

Coherus BioSciences, 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 42.4/100 places it at rank #3202 in our full 7,333-stock universe. At $191M in market capitalization, Coherus BioSciences, 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 (75th percentile), revenue contraction of -82% 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.

The margin cascade tells an important story: gross margins of 68% (+25.1pp vs sector) narrow to operating margins of -358% (-359.7pp vs sector) and net margins of 459.3%, yielding a gross-to-net conversion rate of 679%. This efficient conversion suggests well-controlled operating costs and limited margin leakage between the gross and net levels.

At a current price of $1.67, Coherus BioSciences, Inc. is trading at a premium to fundamental value. Our value factor score of 33/100 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 1.0x (a 95% discount to the sector median of 22.3x), P/B of 2.2x, P/S of 2.0x. The below-sector P/E suggests possible undervaluation or the market pricing in near-term headwinds.

We assign a Very High uncertainty rating to Coherus BioSciences, Inc.. The stock exhibits multiple compounding risk factors: elevated market sensitivity (beta of 1.34), significant leverage (488% debt-to-equity), below-average price stability (35th 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 1.34); significant leverage (488% debt-to-equity); below-average price stability (35th percentile); weak quality scores (28th 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 35th percentile and quality factor at the 28th percentile provide a quantitative summary of the overall risk landscape.

Key risk mitigants include: healthy gross margins of 68% 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 Coherus BioSciences, Inc.'s capital allocation as Standard. Management has shown adequate — though not exceptional — stewardship of shareholder capital. Returns on equity stand at 222.1%, and the balance sheet is managed within acceptable parameters (D/E: 488%). Exemplary allocators typically sustain ROE above 20% and D/E below 50%; Coherus BioSciences, Inc. falls short on at least one dimension.

There is room for improvement in optimizing the capital structure or enhancing shareholder returns. Absent a dividend, the overall capital allocation framework would benefit from either higher reinvestment returns, improved balance sheet efficiency, or increased shareholder distributions. We will monitor for signs of strategic improvement that could warrant an upgrade.

In summary, Coherus BioSciences, Inc. receives a Reduce rating with a composite score of 42.4/100 (rank #3202 of 7,333). Our quantitative framework assigns a No Moat (38/100, trend: widening), Very High uncertainty, and Standard capital allocation. The average factor score across quality, value, momentum, stability, and investment is 39/100.

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