Stock Analysis & Ideas

Syros Pharmaceuticals Stock (NASDAQ:SYRS): Worse than a Powerball Lottery Ticket?

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At first glance, Syros Pharmaceuticals offers an enticing triple-threat of clinical programs. If the trend is indeed your friend, though, then SYRS stock is an enemy to any profit-seeking investor.

Syros Pharmaceuticals (NASDAQ: SYRS) is one of those companies that any conscientious individual would root for but shouldn’t necessarily invest their hard-earned capital in. Sure, it would be great to see Syros’s clinical programs succeed, but cautious financial traders must acknowledge the odds and accept that failure is a possibility. So, I hate to say it, but I’m bearish on Syros Pharmaceuticals stock. I want you to think of SYRS stock like a ticket for the Powerball Lottery that’s been in the headlines lately. Yes, you’re betting small to possibly win big, but the likelihood of actually winning big is minuscule.

Based in Massachusetts, Syros Pharmaceuticals is a biopharmaceutical business with a market cap of around $82 million. It’s a small company, and sometimes a stock representing a business of this size makes a miraculous 5x or 10x move. On the other hand, it’s not unusual for these types of stocks to get cut in half or even worse than that.

Syros Pharmaceuticals Has Three Notable Clinical Programs

Actually, I should say that a share of SYRS stock is like three Powerball tickets, not just one. That’s because Syros Pharmaceuticals has three main clinical programs, and if any of them turn out to be a huge success, then Syros’s investors could be big winners.

Syros’s primary clinical programs are based on genomics. One is tamibarotene, an “oral selective RARα agonist in RARA-positive patients with higher-risk myelodysplastic syndrome and acute myeloid leukemia.” The second one is SY-2101, an “oral form of arsenic trioxide in patients with acute promyelocytic leukemia.” Then there’s SY-5609, an “oral CDK7 inhibitor in patients with select solid tumors.”

I should re-emphasize here that I’m rooting for these oncology programs to succeed. Syros plans to present its initial data from the SELECT-AML-1 Phase 2 clinical trial to evaluate tamibarotene at a meeting in December. Hopefully, the company will have positive data to report.

Hope isn’t a viable investing strategy, however. For a small biopharmaceutical company, a clinical trial data release is like an earnings report on steroids. I’ve seen stocks like SYRS gain or lose 50% or more after clinical study data announcements. Again, we’re basically talking about a lottery ticket with this type of stock.

Syros Pharmaceuticals’ Financials are Abysmal

Syros Pharmaceuticals is probably about to release a quarterly financial report, so my bearish slant on SYRS stock could change soon. It’s hard to know when the company’s next quarterly report will actually come out, though, since nothing about this is mentioned on the company’s press releases page.

So, we’ll have to use the data that’s available. According to the company’s most recent corporate presentation, Syros Pharmaceuticals has enough “Capital to fund planned operations into 2025.” That’s literally the only finance-related statement in the entire presentation – not a good sign if you ask me.

Turning to Syros Pharmaceuticals’ most recently filed Form 10-Q as of this writing, I started to question the company’s rather optimistic claim about its ability to self-finance its operations. Alarmingly, Syros’s cash, cash equivalents, & short-term investments balance dwindled from $130.4 million as of December 31, 2021, to $86.3 million as of June 30, 2022.

Also, year-over-year, Syros Pharmaceuticals’ net loss widened from $22.49 million to $34.48 million. At this rate, Syros soon won’t be able to call itself a viable business venture, not to mention a well-capitalized one.

Is SYRS a Good Stock to Buy, According to Analysts?

Turning to Wall Street, SYRS is a Strong Buy based on four unanimous Buy ratings. The average Syros Pharmaceuticals price target is $39.25, implying a massive 866.75% upside potential.

Conclusion: Should You Consider Syros Pharmaceuticals Stock?

Like a Powerball Lottery ticket holder, it’s possible that you might hit the jackpot with a share of SYRS stock. Is this how you really want to invest, though? Remember, sensible investing is based on high-probability setups, not on what’s merely possible.

SYRS stock has already lost significant value over the past year, two years, and five years. Pick practically any time frame, and you’ll find that SYRS shares are deeply underwater. The company’s financials don’t provide any indication that this situation will improve, either. So, feel free to buy a Powerball Lottery ticket or two just for the fun of it – but as a serious investment, both the lottery ticket and Syros Pharmaceuticals stock should probably be avoided.

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