NEUP

We rate Neuphoria Therapeutics Inc. (NEUP) as a Reduce with a composite score of 46.7/100 at a current price of $4.38. 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 quality (57th percentile) and investment (48th percentile), which together account for the majority of the composite score. Offsetting weakness in momentum (25th percentile) and value (28th percentile) tempers our overall conviction. We assign a No Moat rating (30/100), Medium uncertainty, and Poor capital allocation.

Key items to watch: momentum to confirm whether the current price trend has legs; 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 stable, which suggests the competitive landscape is stable for now.

Neuphoria 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 46.7/100 places it at rank #2533 in our full 7,333-stock universe. At $13M in market capitalization, Neuphoria 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 (25th percentile) suggest caution regarding the near-term price trend. Revenue growth data is unavailable, limiting our ability to confirm whether momentum is fundamentally supported.

The margin cascade tells an important story: gross margins of 100% (+57.5pp vs sector) narrow to operating margins of -239% (-240.8pp vs sector) and net margins of -109.1%, yielding a gross-to-net conversion rate of -109%. 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 $4.38, Neuphoria 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 a P/E of 18.3x (roughly in line with the sector median of 22.3x), EV/EBITDA of 29.3x (at a premium), P/B of 0.8x, P/S of 1.5x. The below-sector P/E suggests possible undervaluation or the market pricing in near-term headwinds.

We assign a Medium uncertainty rating to Neuphoria Therapeutics Inc.. The stock presents a balanced risk profile: current negative profitability (net margin -109.1%) and below-average price stability (39th percentile). While not risk-free, the core business fundamentals are adequate to withstand moderate economic stress, and the range of potential outcomes around our fair value estimate is manageable.

Specific risk factors that inform our assessment include: current negative profitability (net margin -109.1%); below-average price stability (39th percentile); low beta of 0.60 — while defensive, this may indicate limited upside participation in bull markets. 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 57th 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; conservative leverage (23% 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 is favorable for long-term investors.

We rate Neuphoria Therapeutics Inc.'s capital allocation as Poor. Key concerns include low returns on equity (4.3%), negative profitability. Exemplary capital allocators generate ROE above 20% and maintain conservative leverage — Neuphoria 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, Neuphoria Therapeutics Inc. receives a Reduce rating with a composite score of 46.7/100 (rank #2533 of 7,333). Our quantitative framework assigns a No Moat (30/100, trend: stable), Medium uncertainty, and Poor 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 Neuphoria Therapeutics Inc. at this time. The combination of limited competitive advantages, medium uncertainty, and poor capital allocation suggests unfavorable risk-reward at current levels. We recommend investors avoid new positions and existing holders consider reducing exposure.