LQDA

We rate Liquidia Corp (LQDA) as a Hold with a composite score of 53.2/100 at a current price of $33.60. 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 (76th percentile) and quality (65th percentile), which together account for the majority of the composite score. Offsetting weakness in investment (17th percentile) and value (47th percentile) tempers our overall conviction. We assign a No Moat rating (37/100), 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.

Liquidia Corp 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 53.2/100 places it at rank #1501 in our full 7,333-stock universe. At $2.0B in market capitalization, Liquidia Corp 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 1385% and momentum in the 76th 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 17th percentile indicates reinvestment patterns that investors should monitor for sustainability.

The margin cascade tells an important story: gross margins of 58% (+15.6pp vs sector) narrow to operating margins of -553% (-554.5pp vs sector) and net margins of -556.8%, yielding a gross-to-net conversion rate of -958%. 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 $33.60, Liquidia Corp is trading near fair value based on current fundamentals. Our value factor score of 47/100 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. Valuation metrics are mixed, with no strong signal of mispricing in either direction.

The stock currently trades at EV/EBITDA of 353.4x (at a premium), P/B of 132.5x, P/S of 41.3x. We evaluate these multiples in the context of both absolute levels and sector-relative positioning to form our valuation view.

We assign a High uncertainty rating to Liquidia Corp. Key risk factors include significant leverage (1152% debt-to-equity), current negative profitability (net margin -556.8%), the combination of leverage (1152% D/E) and thin margins (-556.8% net) amplifies downside risk. 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 (1152% debt-to-equity); current negative profitability (net margin -556.8%); the combination of leverage (1152% D/E) and thin margins (-556.8% net) amplifies downside risk. 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 51th percentile and quality factor at the 65th percentile provide a quantitative summary of the overall risk landscape.

Key risk mitigants include: healthy gross margins of 58% 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 Liquidia Corp's capital allocation as Poor. Key concerns include low returns on equity (-483.6%), elevated leverage (1152% D/E), negative profitability, weak asset returns (ROA -38.6%). Exemplary capital allocators generate ROE above 20% and maintain conservative leverage — Liquidia Corp 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, Liquidia Corp receives a Hold rating with a composite score of 53.2/100 (rank #1501 of 7,333). Our quantitative framework assigns a No Moat (37/100, trend: stable), High uncertainty, and Poor capital allocation. The average factor score across quality, value, momentum, stability, and investment is 51/100.

Our analysis supports a neutral stance on Liquidia Corp. 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.