Phathom Pharmaceuticals, Inc. — Earnings Quality Grade F
PHAT · Healthcare
Major red flags
Screening Summary
Management Signals
Financial Trends
Revenue & Net Income ($B)
Margins (%)
18-Point Screening
Revenue Quality
DSO 163 days, change -93 days YoY
AR growth 101.4% vs revenue growth 216.9%
Revenue grew 216.9% but CFFO only 37.5%
Expense Quality
Inventory 72.0% vs COGS 183.4%. Normal
CapEx growth 69.6% vs revenue 216.9%. Normal
SG&A/Gross Profit = 183.4%, exceeds 70%
Gross margin 87.1%, change +1.5pp. Stable
Cash Flow Quality
CFFO < Net Income for 3 consecutive years
Small-cap context: Small-cap CFFO/NI often diverges from working-capital swings, not necessarily manipulation.
FCF is negative ($-0.2B)
Accruals ratio = -21.0%. Low accruals
Cash $0.1B covers 61% of debt $0.2B
Balance Sheet Health
No goodwill. Clean balance sheet
Interest coverage = -2.3x (<2x). Financial stress
Other assets 64.7% vs revenue 216.9%. Normal
No write-off data
Acquisition Risk
FCF after acquisitions negative for 3 years
Small-cap context: A single acquisition on a small balance sheet can trip serial-acquirer logic.
No goodwill
Manipulation Score
M-Score = -1.33 (> -1.78). LIKELY MANIPULATOR
Small-cap context: Beneish M-Score was calibrated on large-caps; small-cap DSO/inventory volatility mechanically inflates it.
Beneish M-Score
Altman Z-Score
Generated from public financial data using forensic accounting frameworks. Not investment advice. Data: Yahoo Finance · 2026-04-25