GURUFOCUS.COM » STOCK LIST » Healthcare » Biotechnology » Aerovate Therapeutics Inc (NAS:AVTE) » Definitions » Degree of Financial Leverage

AVTE (Aerovate Therapeutics) Degree of Financial Leverage : 0.43 (As of Sep. 2024)


View and export this data going back to 2021. Start your Free Trial

What is Aerovate Therapeutics Degree of Financial Leverage?

Degree of Financial Leverage (DFL) measures the percentage change in EPS for a unit change in Earnings Before Interest and Taxes (EBIT). Aerovate Therapeutics's Degree of Financial Leverage for the quarter that ended in Sep. 2024 was 0.43. The higher Degree of Financial Leverage, the more volatile earnings will be.

The industry rank for Aerovate Therapeutics's Degree of Financial Leverage or its related term are showing as below:

AVTE's Degree of Financial Leverage is ranked better than
72.73% of 1441 companies
in the Biotechnology industry
Industry Median: 0.94 vs AVTE: 0.43

Aerovate Therapeutics Degree of Financial Leverage Historical Data

The historical data trend for Aerovate Therapeutics's Degree of Financial Leverage can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

Aerovate Therapeutics Degree of Financial Leverage Chart

Aerovate Therapeutics Annual Data
Trend Dec19 Dec20 Dec21 Dec22 Dec23
Degree of Financial Leverage
- 16.56 -0.18 -0.70 0.68

Aerovate Therapeutics Quarterly Data
Dec19 Mar20 Jun20 Sep20 Dec20 Mar21 Jun21 Sep21 Dec21 Mar22 Jun22 Sep22 Dec22 Mar23 Jun23 Sep23 Dec23 Mar24 Jun24 Sep24
Degree of Financial Leverage Get a 7-Day Free Trial Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 0.77 0.68 0.63 0.53 0.43

Competitive Comparison of Aerovate Therapeutics's Degree of Financial Leverage

For the Biotechnology subindustry, Aerovate Therapeutics's Degree of Financial Leverage, along with its competitors' market caps and Degree of Financial Leverage data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.


Aerovate Therapeutics's Degree of Financial Leverage Distribution in the Biotechnology Industry

For the Biotechnology industry and Healthcare sector, Aerovate Therapeutics's Degree of Financial Leverage distribution charts can be found below:

* The bar in red indicates where Aerovate Therapeutics's Degree of Financial Leverage falls into.



Aerovate Therapeutics Degree of Financial Leverage Calculation

Aerovate Therapeutics's Degree of Financial Leverage for the quarter that ended in Sep. 2024 is calculated as:

Degree of Financial Leverage=% Change in Earnings per Share (Diluted)**/% Change in EBIT
=( -2.99 (Sep. 2024) / -2.755 (Sep. 2023) - 1 )/( -90.259 (Sep. 2024) / -75.195 (Sep. 2023) - 1 )
=0.0853/0.2003
=0.43***

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

** TTM data of EPS and EBIT was used to calculate Degree of Financial Leverage.
*** Please be aware that the Degree of Financial Leverage calculations are based on company-level data using the primary share class. The calculated data provided is for demonstration purposes and may slightly differ from the results displayed in the title due to potential variations caused by currency exchange rate differences throughout the year.


Aerovate Therapeutics  (NAS:AVTE) Degree of Financial Leverage Explanation

Degree of Financial Leverage (DFL) is a leverage ratio that measures the sensitivity of a company’s Earnings per Share (EPS) to fluctuations in its operating income, also referred to as Earnings Before Interest and Taxes (EBIT), resulting from adjustments in its capital structure. DFL is an essential tool for companies to assess the appropriate level of debt or financial leverage in their capital structure. When EBIT remains relatively stable, it results in stable earnings and earnings per share. In such cases, the company may consider taking on substantial debt. However, for companies operating in industries with significant fluctuations in EBIT, it is advisable to keep debt at a manageable level.

The higher Degree of Financial Leverage, the more volatile earnings will be. Because interest is a fixed expense, leverage can amplify earnings and EPS. This is beneficial when EBIT is growing, but it can become problematic in tough economic conditions when EBIT is under pressure.

Be Aware

The use of financial leverage varies across different industries and business sectors, and the application of Degree of Financial Leverage (DFL) should be adjusted accordingly.


Aerovate Therapeutics Degree of Financial Leverage Related Terms

Thank you for viewing the detailed overview of Aerovate Therapeutics's Degree of Financial Leverage provided by GuruFocus.com. Please click on the following links to see related term pages.


Aerovate Therapeutics Business Description

Traded in Other Exchanges
N/A
Address
930 Winter Street, Suite M-500, Waltham, MA, USA, 02451
Aerovate Therapeutics Inc is a clinical-stage biopharmaceutical company focused on developing drugs that improve the lives of patients with rare cardiopulmonary disease. The initial focus of the company is on advancing AV-101, a dry powder inhaled formulation of imatinib for the treatment of pulmonary arterial hypertension.
Executives
Ra Capital Healthcare Fund Lp director, 10 percent owner 200 BERKELEY STREET, 18TH FLOOR, BOSTON MA 02116
George A Eldridge officer: See Remarks C/O TARGANTA THERAPEUTICS CORPORATION, 222 THIRD STREET SUITE 2300, CAMBRIDGE MA 02142
Marinus Verwijs officer: SENIOR VICE PRESIDENT, CMC C/O AEROVATE THERAPEUTICS, INC., 200 BERKELEY STREET, FLOOR 18, BOSTON MA 02116
Hunter Gillies officer: Chief Medical Officer C/O AEROVATE THERAPEUTICS, INC., 200 BERKELEY STREET, FLOOR 18, BOSTON MA 02116
Timothy P Noyes director, officer: Chief Executive Officer 1365 MAIN STREET, WALTHAM MA 02451
Benjamin T Dake officer: See Remarks C/O AEROVATE THERAPEUTICS, INC., 200 BERKELEY STREET, FLOOR 18, BOSTON MA 02116
David S. Grayzel director C/O SURFACE ONCOLOGY, 50 HAMPSHIRE ST., 8TH FLOOR, CAMBRIDGE MA 02139
Ralph Niven officer: Chief Development Officer C/O AEROVATE THERAPEUTICS, INC., 200 BERKELEY STREET, FLOOR 18, BOSTON MA 02116
Habib J Dable director C/O ACCELERON PHARMA INC., 128 SIDNEY STREET, CAMBRIDGE MA 02139
Timothy Pigot officer: Chief Commercial Officer AEROVATE THERAPEUTICS, INC., 930 WINTER STREET, SUITE M-500, WALTHAM MA 02451
Donald J Santel director 4362 24TH STREET, SAN FRANCISCO CA 94114
Allison Dorval director C/O INSULET CORPORATION, 600 TECHNOLOGY PARK DRIVE, SUITE 200, BILLERICA MA 01821
Cormorant Asset Management, Lp 10 percent owner 200 CLARENDON STREET, 52ND FLOOR, BOSTON MA 02116
Ra Capital Management, L.p. director, 10 percent owner 200 BERKELEY STREET, 18TH FLOOR, BOSTON MA 02116
Cormorant Global Healthcare Master Fund, Lp 10 percent owner 200 CLARENDON STREET, 52ND FLOOR, BOSTON MA 02116