MeritValue

Eton Pharmaceuticals, Inc.

ETONdata completeness 100%8 fiscal years on file
The thesis, from the filings

Eton Pharmaceuticals, Inc. earns about -52% on invested capital, below its ~9% cost of capital, but has diluted owners by 7% over 5 years — no moat visible in the numbers. The estimate methods put fair value between $4.32 and $4.7 a share.Whether it’s worth owning at today’s price is the last question — and yours to answer, below.

i. The business — what you’d actually own
FigureFY 2021FY 2022FY 2023FY 2024FY 2025
Revenue$21.8M1$21.3M2$31.6M3$39M3$80M3
Net income−$1.96M4−$9.02M5−$936,0006−$3.82M6−$4.6M6
Operating cash flow−$4.72M7$4.82M8$6.82M9$969,0009$10.5M9
Capital expenditure$9,00010$38,00011$012$26,00012$333,00012
Free cash flow (derived)−$4.73M7$4.78M8$6.82M9$943,0009$10.2M9
Total debt$6.68M13$6.42M14$5.38M15$59.6M16$30.6M16
Cash & equivalents$14.4M17$16.3M18$21.4M19$14.9M20$25.9M20
Diluted shares25.2M25.1M25.6M25.9M26.9M

Superscripts are receipts. Each links to the SEC filing the number came from (full list at the bottom).

ii. Your slice — ownership made literal
If you owned
shares
Net assets behind them
$9.72
your share of equity
Profit it earned you last year
−$1.71
Free cash flow it threw off
$3.79
Debt you’d be carrying
$11.36

10 shares is a claim on $9.72 of net worth that earned you −$1.71 and generated $3.79 of cash last year, against $11.36 of debt.

iii. Is this a good business?
Moat signal · return on invested capital
-52% avg · 5y
FY21 -7%FY22 -200%FY23 —FY24 -2%FY25 1%

It earned about -52% on invested capital against a ~9% cost of capital — below the cost of funding. The numbers show no moat.

seeing a moat in the numbers →
Management signal · capital allocation
+7% shares · 5y

Share count is up 7% over 5 years — owners have been diluted. Worth asking what they got for it. Total debt has risen 357% over the same window.

reading capital allocation →

Signals, not verdicts — read from the filings above. Numbers don’t prove a moat; they show its footprint. You decide.

iv. What it’s worth — engine v0.1.0

The 2 estimate methods that apply put fair value between $4.32 and $4.7 a share. They rest on different assumptions, so where they diverge is the story.

DCF · Growth Exit 10Y
$4.7
assumptions (10)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears10
  • fcfGrowth5.0%
  • fcfBase$6.82M
DCF · Growth Exit 5Y
$4.32
assumptions (10)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears5
  • fcfGrowth5.0%
  • fcfBase$6.82M
Earnings Power Value
not applicable
normalized (5y-median) earnings non-positive — EPV undefined
Graham Number
not applicable
diluted EPS missing or non-positive — Graham Number undefined

Different models answer different questions — which to trust when →

v. The price question — last, on purpose
Is today’s price fair?
See live price ↗
Type a price. The ledger answers.
Or set your own belief
FCF growth, next 5 years5.0%
Discount rate (WACC)8.93%
Terminal growth2.5%
At your growth, a share is worth $4.32
The three cases
Bear0.0%$3.45
Base5.0%$4.32
Bull10.0%$5.37

Bear/base/bull growth = 0% / filed history / history + 5pp. Type a price to see the return each case implies.

Default growth 5.0%= this company’s own filed history (median-to-median FCF CAGR, clamped 0–20%). Your adjustments are recorded anonymously. They become the “what do owners actually believe” dataset.

Sources — the receipts
  1. 10-K · period ending 2021-12-31 · accession 0001437749-24-007853 (RevenueFromContractWithCustomerExcludingAssessedTax)
  2. 10-K · period ending 2022-12-31 · accession 0001437749-25-008136 (RevenueFromContractWithCustomerExcludingAssessedTax)
  3. 10-K · period ending 2023-12-31 · accession 0001437749-26-009059 (RevenueFromContractWithCustomerExcludingAssessedTax)
  4. 10-K · period ending 2021-12-31 · accession 0001437749-24-007853 (NetIncomeLoss)
  5. 10-K · period ending 2022-12-31 · accession 0001437749-25-008136 (NetIncomeLoss)
  6. 10-K · period ending 2023-12-31 · accession 0001437749-26-009059 (NetIncomeLoss)
  7. 10-K · period ending 2021-12-31 · accession 0001437749-24-007853 (NetCashProvidedByUsedInOperatingActivities)
  8. 10-K · period ending 2022-12-31 · accession 0001437749-25-008136 (NetCashProvidedByUsedInOperatingActivities)
  9. 10-K · period ending 2023-12-31 · accession 0001437749-26-009059 (NetCashProvidedByUsedInOperatingActivities)
  10. 10-K · period ending 2021-12-31 · accession 0001437749-24-007853 (PaymentsToAcquirePropertyPlantAndEquipment)
  11. 10-K · period ending 2022-12-31 · accession 0001437749-25-008136 (PaymentsToAcquirePropertyPlantAndEquipment)
  12. 10-K · period ending 2023-12-31 · accession 0001437749-26-009059 (PaymentsToAcquirePropertyPlantAndEquipment)
  13. 10-K · period ending 2021-12-31 · accession 0001493152-23-007933 (LongTermDebtCurrent)
  14. 10-K · period ending 2022-12-31 · accession 0001437749-24-007853 (LongTermDebtCurrent)
  15. 10-K · period ending 2023-12-31 · accession 0001437749-25-008136 (LongTermDebtCurrent)
  16. 10-K · period ending 2024-12-31 · accession 0001437749-26-009059 (LongTermDebtNoncurrent)
  17. 10-K · period ending 2021-12-31 · accession 0001493152-23-007933 (CashAndCashEquivalentsAtCarryingValue)
  18. 10-K · period ending 2022-12-31 · accession 0001437749-24-007853 (CashAndCashEquivalentsAtCarryingValue)
  19. 10-K · period ending 2023-12-31 · accession 0001437749-25-008136 (CashAndCashEquivalentsAtCarryingValue)
  20. 10-K · period ending 2024-12-31 · accession 0001437749-26-009059 (CashAndCashEquivalentsAtCarryingValue)