CTMX

We rate CytomX Therapeutics, Inc. (CTMX) as a Hold with a composite score of 51.4/100 at a current price of $5.46. The stock presents a mixed quantitative picture — neither compelling enough to warrant new accumulation nor weak enough to justify selling for existing holders. Our factors are split, and the overall profile suggests patience is warranted.

The rating is primarily driven by strength in momentum (92th percentile) and quality (33th percentile), which together account for the majority of the composite score. Offsetting weakness in stability (22th percentile) and investment (31th percentile) tempers our overall conviction. We assign a Narrow Moat rating (48/100), Very High uncertainty, and Poor capital allocation.

Key items to watch: whether strong momentum is fundamentally supported by revenue trends; the path to profitability. 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.

CytomX 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 51.4/100 places it at rank #1796 in our full 7,333-stock universe. At $526M in market capitalization, CytomX 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 (92th percentile), revenue contraction of -76% 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 100% (+57.5pp vs sector) narrow to operating margins of -54% (-54.9pp vs sector) and net margins of -44.0%, yielding a gross-to-net conversion rate of -44%. 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 $5.46, CytomX Therapeutics, 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 61.8x (a 178% premium to the sector median of 22.3x), EV/EBITDA of 95.1x (at a premium), P/B of 8.6x, P/S of 8.4x. The above-sector P/E multiple suggests the market is pricing in superior growth or quality, which our analysis finds only partially justified by current fundamentals.

We assign a Very High uncertainty rating to CytomX Therapeutics, Inc.. The stock exhibits multiple compounding risk factors: elevated market sensitivity (beta of 2.16), current negative profitability (net margin -44.0%), below-average price stability (22th 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 2.16); current negative profitability (net margin -44.0%); below-average price stability (22th percentile); weak quality scores (33th 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 22th percentile and quality factor at the 33th percentile provide a quantitative summary of the overall risk landscape.

Key risk mitigants include: healthy gross margins of 100% 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 CytomX Therapeutics, Inc.'s capital allocation as Poor. Key concerns include negative profitability. Exemplary capital allocators generate ROE above 20% and maintain conservative leverage — CytomX 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, CytomX Therapeutics, Inc. receives a Hold rating with a composite score of 51.4/100 (rank #1796 of 7,333). Our quantitative framework assigns a Narrow Moat (48/100, trend: stable), Very High uncertainty, and Poor capital allocation. The average factor score across quality, value, momentum, stability, and investment is 42/100.

Our analysis supports a neutral stance on CytomX Therapeutics, Inc.. While the quantitative profile is not weak enough to warrant selling, it lacks the multi-factor strength required for a buy recommendation. Existing holders should maintain positions and monitor for catalysts — either fundamental improvement or valuation compression — that would shift the risk-reward balance.