Owner Scorecard
An independent research publication · records as of August 17, 2026

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DNLI, Denali Therapeutics Inc.

Biotechnology consumer brand UnprofitableNet current asset value

A pharmaceutical business, where patents grant a temporary monopoly the pipeline must keep refilling.

Latest annual: FY2025 10-K
DNLI · Denali Therapeutics Inc.
I

The business

What it sells, where the money comes from, the kind of company it is.

Revenue · FY2025
$0
· −100% 5-yr CAGR
Vital signs · TTM, with 5-yr average
Revenue $4M 5-yr avg $98M
ROIC −68% 5-yr avg −35%
Free cash flow margin −12138% 5-yr avg −269%

Next report By 11/8 · the 10-Q for the quarter ended late September · due within 40 days of period end · has filed ~37 days after · the wire records it on arrival

The business in brief

What this business is and what moves its needle, from its own SEC filings.

Situation
Unprofitable. No meaningful revenue yet; the record is the cash on hand against the burn. Net current asset value. Current assets alone exceed every liability combined, and the surplus is most of the balance sheet: the shape Graham called a net-net.
What moves the needle
The pipeline against the patent cliff, and pricing. What decides it: whether new drugs replace those losing exclusivity, the odds in the clinical pipeline, and how durable pricing stays against payers and generics.
Is it a good business?
Return on capital has rarely cleared the cost of capital (median −33%, above 15% in 0 of 9 years). Owner earnings, the cash-based check, have been thin too. This is price-taker territory, where the balance sheet and the cycle matter more than any multiple; the rest is in the 10-K.

Every line is arithmetic on the company's filings, shown in full in the sections below.

II

The record

Ten years of arithmetic, read across the cycle.

The record, 2016–2025

realized figures from each filing · older years to the left
2016’162017’172018’182019’192020’202021’212022’222023’232024’242025’25TTMTTMJun 2026
Income statement
$0$0$129M$27M$336M$49M$108M$331M$0$0$4MRevenueRevenue
——25%174%18%162%83%31%——n/mSG&A / revenueSG&A/rev
——111%725%63%545%331%128%——n/mR&D / revenueR&D/rev
($87M)($90M)($46M)($213M)$63M($296M)($341M)($197M)($487M)($555M)($543M)Operating incomeOp. inc.
——−35.9%−799.1%18.7%−607.8%−314.2%−59.5%——n/mOperating marginOp. mgn
($87M)($88M)($36M)($198M)$71M($291M)($326M)($145M)($423M)($513M)($511M)Net incomeNet inc.
Cash flow & returns
($72M)($77M)$50M($152M)$416M($211M)($245M)($358M)($348M)($413M)($434M)Operating cash flowOp. cash
$1M$3M$7M$8M$9M$9M$10M$17M$8M$11M$12MDepreciation & amortizationD&A
$10M$4M$60M($331K)$286M($15M)($29M)($338M)($36M)($11M)($30M)Working capital & otherWC & other
$6M$3M$3M$18M$3M$9M$18M$13M$16M$10M$3MCapexCapex
——2.6%67.2%0.9%17.5%16.4%3.9%——94.8%Capex / revenueCapex/rev
($78M)($80M)$47M($169M)$413M($220M)($263M)($371M)($364M)($422M)($437M)Owner earningsOwner earn.
——36.2%−635.3%123.1%−451.9%−242.1%−112.2%——n/mOwner earnings marginOE mgn
($78M)($80M)$47M($169M)$413M($220M)($263M)($371M)($364M)($422M)($437M)Free cash flowFCF
——36.2%−635.3%123.1%−451.9%−242.1%−112.2%——n/mFree cash flow marginFCF mgn
($219M)($41M)($287M)$148M($623M)($22M)($141M)$249M($89M)$255M—Investing cash flowInv. cash
$300M$296M$97M$6M$635M$19M$311M$18M$484M$189M—Financing cash flowFin. cash
$10M$179M($140M)$2M$428M($214M)($75M)($91M)$48M$32M—Change in cashΔ cash
—-29%-8%-53%10%-35%-33%-17%-37%-54%-68%ROICROIC
—-19%-7%-50%6%-30%-31%-14%-34%-51%-61%Return on equityROE
—−19%−7%−50%6%−30%−31%−14%−34%−51%−61%Retained to equityRetained/eq
Balance sheet
$40M$467M$612M$455M$1.5B$1.3B$1.3B$1.0B$1.2B$966M$940MCash & investmentsCash+inv
—$3M$2M$3M$1M$5M$3M$9M$11M$3M$12MAccounts payablePayables
—$410M$481M$430M$1.5B$897M$1.4B$1.1B$864M$901M$754MCurrent assetsCur. assets
—$14M$33M$45M$72M$378M$364M$78M$102M$98M$90MCurrent liabilitiesCur. liab.
—28.9×14.7×9.5×20.9×2.4×3.8×13.6×8.5×9.2×8.4×Current ratioCurr. ratio
—$15M$25M$47M$41M$39M$44M$46M$55M$52M—Net PP&ENet PP&E
—$487M$662M$553M$1.6B$1.4B$1.5B$1.2B$1.4B$1.1B$1.2BTotal assetsAssets
($40M)($467M)($612M)($455M)($1.5B)($1.3B)($1.3B)($1.0B)($1.2B)($966M)($940M)Net debt / (cash)Net debt
—$21M$115M$158M$454M$442M$418M$123M$144M$131M—Total liabilitiesTotal liab.
($94M)$466M$547M$395M$1.2B$962M$1.0B$1.0B$1.2B$1.0B$835MShareholders’ equityEquity
——14.5%143.9%15.0%175.2%92.1%32.7%——n/mStock comp / revenueSBC/rev
Per share
6.4M15.0M92.6M95.6M113M122M126M137M164M173M187MShares out (diluted)Shares
$0.00$0.00$1.39$0.28$2.98$0.40$0.86$2.41$0.00$0.00$0.02Revenue / shareRev/sh
$-13.49$-5.89$-0.39$-2.07$0.63$-2.39$-2.60$-1.06$-2.57$-2.97$-2.74EPS (diluted)EPS
$-12.15$-5.31$0.50$-1.77$3.67$-1.81$-2.09$-2.70$-2.21$-2.44$-2.34Owner earnings / shareOE/sh
$-12.15$-5.31$0.50$-1.77$3.67$-1.81$-2.09$-2.70$-2.21$-2.44$-2.34Free cash flow / shareFCF/sh
$0.95$0.19$0.04$0.19$0.03$0.07$0.14$0.09$0.10$0.06$0.02Cap. spending / shareCapex/sh
$-14.65$31.13$5.90$4.13$10.21$7.92$8.30$7.50$7.48$5.87$4.47Book value / shareBVPS

The diluted share count moved ×2.33 into 2017 — shares issued, not a split the totals corroborate — and the per-share figures carry the counts as filed.

The diluted share count moved ×6.19 into 2018 — shares issued, not a split the totals corroborate — and the per-share figures carry the counts as filed.

Per-share growththe realized rate an owner's share compounded
9-yr5-yr
Capital spending / share−27.2%/yr+14.9%/yr
Book value / share—−10.5%/yr

Owner-earnings bridge

FY2021–FY2025cash-flow statement, SEC EDGAR →

Net income is the accountant's number; owner earnings is the cash an owner could take out. The walk between them, off the cash-flow statement, and whether the gap is widening or holding.

In fiscal 2025 the business turned a $513M loss into ($422M) of owner earnings: more cash than the profit line showed, after the non-cash charges and the capital it put back in.

FY2025FY2024FY2023FY2022FY2021
Reported net income($513M)($423M)($145M)($326M)($291M)
Depreciation & amortizationnon-cash charge added back+$11M+$8M+$17M+$10M+$9M
Stock-based compensationreal costnon-cash, but a real cost+$100M+$103M+$108M+$100M+$85M
Working capital & othertiming of cash in and out, other non-cash items−$11M−$36M−$338M−$29M−$15M
Cash from operations($413M)($348M)($358M)($245M)($211M)
Capital expenditurecash put back in to keep running and to grow−$10M−$16M−$13M−$18M−$9M
Owner earnings($422M)($364M)($371M)($263M)($220M)
Owner-earnings marginowner earnings ÷ revenue——-112%-242%-452%

Owner earnings is the cash an owner could pull out without starving the business: operating cash less the capital it must spend to hold its position . The cash-flow statement also adds stock comp back as non-cash, but it is a real cost paid in shares; counted as the expense it is (less $100M), owner earnings is nearer ($522M).

Maintenance capex is estimated as depreciation where a growing business invests above it; free cash flow is the figure the scorecard's free-cash margin reads.

III

Quality & stewardship

Returns, the balance sheet, capital allocation, and pay.

Owner’s Scorecard

FY2025 10-K · source on SEC EDGAR →

Will it survive?

  • Can it pay its interest? —
    No meaningful interest burden
    Little or no interest expense reported
    What this means

    Little or no interest expense reported, the business isn't leaning on lenders to operate.

  • How heavy is the debt, net of cash? +$868M
    Net cash, debt-free
    Cash $205M + ST investments $663M − debt $0
    What this means

    Cash and short-term investments exceed every dollar of debt by $868M, on net the company owes nothing, and can act from strength when others can't. It also holds $98M in longer-dated marketable securities; counting those, it sits at net cash of $966M. Net debt is the leverage figure that matters: the cash is already set against the debt. Strategic or illiquid investments aren't counted here.

  • How long is cash tied up? —
    Not enough data
    What this means

    The filing data didn't include the inputs for this check.

Is it a good business?

  • Return on invested capital —
    Not enough data
    Industry peers: median -41%
    What this means

    The filing data didn't include the inputs for this check.

  • Owner-earnings margin -177%
    Consumes cash through the cycle
    6-yr median margin, range -635%–123%; latest ($422M) = operating cash ($413M) − maintenance capex $10M
    Industry peers: median -127%
    What this means

    What an owner could take out without starving the business: operating cash less the maintenance capital it must spend to hold its position — Buffett's owner earnings. Treating stock comp as the real expense it is (less $100M of SBC) leaves ($522M).

  • Are earnings backed by cash? ($413M)
    Loss, and burning cash
    Net income ($513M) · cash from operations ($413M)
    What this means

    The company reported a net loss, so a conversion ratio isn't meaningful. What matters then is whether operations still threw off cash, here, they did not.

How is the cash used?

  • Where do the earnings go? —
    Not enough data
    What this means

    The filing data didn't include the inputs for this check.

  • Investing or harvesting? 0.85×
    Maintaining
    Capex $10M ÷ depreciation & amortization as filed $11M
    What this means

    Descriptive, not a grade. Above ~1× means investing faster than assets wear out (growth, or, sustained for years, today's earnings carrying less depreciation than tomorrow's will). Below means spending less than it's wearing out (efficiency, or a melting asset base). The ratio won't tell you which; the filings will.

Graham’s defensive tests · 1 of 3 met

Graham’s numerical criteria for the defensive investor (The Intelligent Investor, ch. 14), run on the filings. A floor of safety, not a buy signal; many fine modern businesses fail his strictest liquidity rules by design.

  • Adequate size Miss
    Revenue ≥ $2B · $0
    What this means

    Big enough to weather a storm. Graham's 1972 floor was ~$100M of sales (≈ $700M today); we use a $2B revenue line as a conservative modern stand-in.

  • Strong liquidity Pass
    Current ratio ≥ 2× · 9.16×
    What this means

    Current assets at least twice current liabilities, near-term bills covered without touching the business. Strict by design: many cash-rich modern firms run leaner and miss it, holding their cushion in longer-dated securities.

  • Earnings stability Miss
    A profit every year (10-yr record) · 9 loss years
    What this means

    Graham wanted earnings in each of the past ten years, the stability a defensive owner leans on.

  • Dividend record —
    Uninterrupted dividends · no dividend line tagged in the data
    What this means

    An unbroken dividend was Graham's mark of durability. This record carries no dividends-paid line in any year — common for partnerships, whose distributions file under tags the chain doesn't read — so the criterion is withheld rather than judged on silence.

  • Earnings growth —
    Earnings +33% over the record · —
    What this means

    Earnings were negative early in the record, a growth rate isn't meaningful.

  • Moderate price —
    P/E ≤ 15 and P/E × P/B ≤ 22.5 · decided by the price
    What this means

    Graham's valuation gate, the wall he kept between a sound business and a sound investment. Three-year average earnings are $-2.25/share (latest year $-3.21), the averaged base the calculator's gate runs on, and book value is $6.34/share. Enter a price in “What the price implies” just below for the P/E, P/B, and whether it clears. But this is the rule Buffett outgrew: there's no hard P/E law, and a wonderful business can deserve a far richer multiple if the thesis holds, treat it as the bargain-hunter's floor, not a verdict on the price.

Durability & moat, 2016–2025

Whether the record’s returns held, and what the capital reinvested earned.

  • Profitable years 1 of 10
    What this means

    Lost money in 9 year(s), look at what happened there before trusting the average.

  • Operating margin −272% → −327% (3-yr avg ends)
    What this means

    The recent-years average (−327%) sits below the early years (−272%), but the latest year (−60%) is back near the early level: a cyclical trough dragging the window down, not a one-way slide. The through-cycle median is −314% — read it across the cycle, not on the dip.

  • Worst year 2019 · −799.1% op. margin
    What this means

    Operations went underwater in 2019, understand why before trusting the good years.

All figures as filed; the source filing is linked above.

Current Position

as of the latest quarter, Jun 30, 2026

Can the business pay what it owes this year, off the freshest balance sheet: the quality of the assets, the debt actually coming due, and what a low ratio means here.

Current assets$754M
  • Cash & short-term investments$710M
  • Receivables$4M
  • Inventory$4M
  • Other current assets$35M
Current liabilities$90M
  • Accounts payable$12M
  • Other current liabilities$78M
Current ratio8.37×all current assets ÷ what's due · Graham looked for 2×
Quick ratio8.32×stricter: inventory excluded
Cash ratio7.89×strictest: cash alone against what's due
Working capital$664Mthe cushion left after near-term bills
Cash runway1.6 yrsthe business is consuming cash; this is how long the cash on hand lasts at that rate
Current ratio, recent quarters10.0× → 8.4×
Deeper floors
Tangible book value$800Mequity stripped of goodwill & intangibles
Net current asset value$431MGraham's net-net: current assets less all liabilities
Debt incl. operating leases$32M$32M of it operating leases

From the company's latest filing.

Peers, Biotechnology

The same industry, side by side on owner economics. Each column names the period it is read over, and a median resting on fewer than three years carries that count beside it; the group median at the foot is the line to read each figure against.

CompanyRevenuelatest FY, USDGross marginmedian over the recordOp. marginmedian over the recordROICmedian over the recordOwner earn. marginmedian over the record
AMGNAmgen Inc.$36.8B76%36.1%18%35%
BCRXBioCryst Pharmaceuticals Inc.$875M95%-113.1%-142%3y-91%
ADMAADMA Biologics Inc$510M-13%-106.6%-39%-158%
ADPTAdaptive Biotechnologies Corporation$277M68%-108.0%-32%-97%
AUTLAutolus Therapeutics PLC$75M-20%2y-358.9%1y-192%2y-387%1y
ACOGAlpha Cognition Inc.$10M—-221.7%1y—-200%1y
DNLIDenali Therapeutics Inc.$0—-186.8%-33%-177%
ALLOAllogene Therapeutics Inc.$0—-157.9%1y-44%-181%1y
Group median——-135.5%-39%-167%
IV

The price

What a price has to assume.

What the price implies

reverse-DCF

Denali Therapeutics Inc. is profitable, but owner earnings are negative this year because capital spending currently outruns operating cash, a build-out, so the owner-earnings reverse-DCF has no positive base to grow. We read the price from both ends instead: type a price to see the steady-state profitability it demands, then set the mature margin you would believe and weigh the two against each other. Nothing leaves your browser unless you enter it in your notebook.

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The assumptions

Revenue, delivered8%/yr’20→’25

Enter a price to run it.

Owner earnings it must reach—
Margin the price demands—
Owner-earnings margin today−12138%

Two reads of one future. From your price: the owner earnings the company must reach, valued at a mature multiple and discounted back at your rate, expressed as the margin it implies on revenue grown at your rate. From your belief: the mature margin you would credit, set on the dial above. When the margin the price demands runs above the one you would believe, you are paying for a future taken on faith. For a deep cyclical at a trough, normalized through-cycle earnings are the better lens; this mode is for the genuinely unprofitable, and for the profitable business whose capital spending currently outruns its cash.

Weigh DNLI against another business →

Cite: Owner Scorecard, "Denali Therapeutics Inc. (DNLI), the owner's record," https://ownerscorecard.com/c/DNLI, data as of 2026-08-17.

Manual order: ← DNA its page in the Manual DNOW →

Industry order: ← DNA the Biotechnology chapter EVAX →