Xeris Biopharma Holdings, Inc. (XERS): A Bull Case Theory

We came across a bullish thesis on Xeris Biopharma Holdings, Inc. on Alpha Talon Investment Research’s Substack by AT Investment Research and Rudy Does Research. In this article, we will summarize the bulls’ thesis on XERS. Xeris Biopharma Holdings, Inc.'s share was trading at $7.05 as of December 15th. XERS’s forward P/E was 64.10 according to Yahoo Finance.

Xeris Biopharma Holdings, Inc., a commercial-stage biopharmaceutical company, engages in developing and commercializing therapies for chronic endocrine and neurological diseases in Illinois. XERS is transitioning from a survival-stage biotech into a profitable specialty-pharma platform, underpinned by three marketed products and a robust pipeline. By 2026, revenue is expected to surpass $360 million as Recorlev grows and XP-8121 advances, potentially exceeding $900 million by 2028 with EBITDA margins of 22–25%, generating roughly $240 million in EBITDA.

Despite this, Xeris trades at a distressed biotech multiple of ~11x forward EBITDA versus 12–14x for peers, presenting a re-rating opportunity. A base-case 12x 2030 EBITDA implies $17–18 per share, with a bull case reaching $25–28 per share and a bear case anchored near current levels due to recurring cash flow and a debt-free balance sheet.

The company’s growth model benefits from a self-reinforcing cash-compounder flywheel: free cash flow funds debt reduction, which lowers risk perception and attracts institutional capital, compressing the cost of equity and expanding valuation faster than earnings. Capital allocation prioritizes organic growth, debt retirement, and internal funding for XP-8121, avoiding overextension into unrelated acquisitions.

Xeris’ moat is multidimensional: proprietary formulation platforms XeriSol™ and XeriJect™ create high barriers to replication, regulatory exclusivity shields Recorlev and XP-8121, and a niche-focused commercial model ensures durable payer relationships. The company targets small, complex markets unattractive to Big Pharma, enhancing pricing power and strategic insulation. Operational precision, rather than scale, drives profitability, and platform replication potential amplifies optionality.

Risks are operational: execution, payer adoption, cash-flow timing, and market sentiment. These are mitigated through specialized commercialization, conservative financial management, and consistent delivery. Xeris’ evolution reflects control over cash flow, risk, and perception, positioning it for a compounding rerating as profitability and growth milestones align.

Previously we covered a bullish thesis on Harrow, Inc. (HROW) by Simon in October 2024, which highlighted strong revenue growth, a direct-to-provider model, and promising products like Vevye. The stock has appreciated approximately 3.69% since our coverage. The thesis still stands as growth momentum continues. AT Investment Research shares a similar bullish view but focuses on Xeris Biopharma’s profitability transition, cash-compounder flywheel, and proprietary formulation moat.

Xeris Biopharma Holdings, Inc. is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 30 hedge fund portfolios held XERS at the end of the third quarter which was 31 in the previous quarter. While we acknowledge the risk and potential of XERS as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than XERS and that has 10,000% upside potential, check out our report about this cheapest AI stock.

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Disclosure: None.