Apellis Pharmaceuticals, Inc.

Where It Passes

Where It Falls Short

• Valuation0% pass✓ 1✗ 27▾

  No clean pass — all 13 investors flag at least one valuation criterion

  Price / 3-yr avg EPS

  ✗Graham<= 15x

  Price-to-Book Ratio14.1x

  ✗Graham<= 1.5x

  P/E x P/B

  ✗Graham<= 22.5

  Basic earnings-growth PEG (dividends excluded)P/E 204.0x (growth N/A)

  ✗Lynch< 1.0 (ideally < 0.5)

  EBIT / Enterprise Value1.1%

  ✗Greenblatt> 10%

  Earnings Yield + ROC AssessmentEY=1.1%, ROC=24.4%

  ✗GreenblattBoth EY > 10% and ROC > 25%

  Price / EPS204.0x

  ✗Dreman< 12x✗Templeton< 12x (fixed ceiling; proxy for the market's cheapest 40%)

  Price / (CFO / Shares)115.0x

  ✗Dreman< 8x

  Price / Book Value per Share14.1x

  ✗Dreman< 1.2x✗Templeton< 1.5x✗SchlossP/B <= 0.80x (app cutoff)

  Valuation ReasonablenessP/E=204.0x

  ✗MungerP/E < 25 or Owner Earnings Yield > 5%

  P/E or FCF YieldP/E=204.0x, FCF Yield=0.9%

  ✗PabraiP/E < 15 or FCF Yield > 10%

  P/B or P/E vs. Historical AverageP/E=204.0x, P/B=14.1x

  ✗MarksP/E < 15 or P/B < 2.0

  Discount to Intrinsic ValueN/A (negative normalized EPS)

  ✗Marks>= 20% below intrinsic value

  Price / FCF per Share115.8x

  ✗Ackman<= 25

  Price vs. Trailing Low

  ✗Templeton<= 120% of trailing low (certified split-adjusted live window)

  Net income / market capitalization+2.56%; #2528/6340 (top 39.9%)

  ✗AsnessTop 30% of eligible cross-section✗OshaughnessyTop 10% of eligible cross-section

  Positive book equity / market capitalization+0.0796; #4861/6449 (top 75.4%)

  ✗AsnessTop 30% of eligible cross-section

  Price / Diluted EPS204.0x

  ✗NeffP/E <= 15x (app proxy for a P/E 40%-60% below the market)

  (EPS CAGR % + Dividend Yield %) / P/E

  ✗Neff> 0.7 (Neff's published traditional edge)

  Price / Tangible Book Value per Share14.09x

  ✗SchlossP/TBV <= 1.00x (app cutoff)

  Book Value per Share Change+7.8%

  ✓SchlossLatest BVPS >= earliest BVPS over >= 3 years (app rule)

  Revenue / market capitalization+0.2120; #3722/5247 (top 70.9%)

  ✗OshaughnessyTop 10% of eligible cross-section

  (Operating cash flow - capex) / market capitalization+0.86%; #2424/4519 (top 53.6%)

  ✗OshaughnessyTop 10% of eligible cross-section

  Trailing six-month price return through the evaluation date

  ✗OshaughnessyTop 10% of eligible cross-section
• Valuation models0% pass✗ 3▾

  APLS overvalued: all 3 models price fair value below $40.79 (median $6.42)

  Graham fair value$3.61

  ✗Graham-1029.9% margin vs $40.79

  Munger fair value$6.42

  ✗Munger-535.4% margin vs $40.79

  Ackman fair value$12.62

  ✗Ackman-223.2% margin vs $40.79
• Debt & Leverage8% pass✓ 3✗ 12▾

  11 of 12 flag APLS's debt & leverage — Graham, Buffett, Lynch +8 more

  LT Debt vs Net Current Assets

  ✗GrahamLT Debt <= Net Current Assets

  Debt/Equity & Interest CoverageD/E: 1.10, IC: 3.8x

  ✗BuffettD/E < 0.5 AND Interest Coverage > 5x

  Total Debt / Equity1.10

  ✗Lynch< 0.33

  Cash - Long-term Debt

  ✗LynchPositive preferred

  LT Debt / Total Assets Change0.00% -> 0.00%

  ✓PiotroskiDecreased YoY

  Current Assets / Current Liabilities3.63

  ✓Dreman> 1.5✓SchlossCurrent ratio >= 1.50x (app cutoff)

  Total Debt / Shareholders' Equity1.10

  ✗Dreman< 0.8✗Templeton< 1.0 (fixed cap; proxy for below-sector-median leverage)✗SchlossD/E < 1.00x

  Debt Levels1.10

  ✗MungerDebt/Equity < 0.5✗AkreDebt/Equity < 0.3

  Interest Coverage & Debt/EBITDAIC=1.3x, D/EBITDA=N/A (D&A unavailable)

  ✗MarksInterest Coverage > 3x; Debt/EBITDA < 4x

  Total Debt / Shareholders Equity1.10

  ✗Ackman<= 1.0

  Negative debt-to-equity (higher means less debt)-1.0990; #3320/4210 (top 78.9%)

  ✗AsnessTop 30% of eligible cross-section
• Profitability13% pass✓ 11✗ 24▾

  14 of 16 flag APLS's profitability — Graham, Buffett, Lynch +11 more

  Positive EPS (10 years)1/12 years positive

  ✗GrahamPositive EPS every year for 10 years

  EPS Growth (3-yr avg, 10-yr window)N/A (negative base EPS)

  ✗Graham>= 33% growth

  Net Income Positive (10+ years)1/12 years positive

  ✗BuffettPositive every year for 10+ years

  ROE (up to 5-year arithmetic mean)-222.4%

  ✗Buffett> 15% arithmetic mean (app rule)

  Operating Margin (10-yr trend)5.5% (latest)

  ✓BuffettStable or rising over 10 years

  Free Cash Flow Proxy

  ✗BuffettPositive and growing

  Earnings Variance (10-yr CoV)N/A (negative mean EPS)

  ✗BuffettCoV < 0.3

  Retained Earnings Effectiveness

  ✗Buffett$1 retained -> > $1 market value created

  Basic earnings-growth PEG (dividends excluded)P/E 204.0x (growth N/A)

  ✗Lynch< 1.0 (ideally < 0.5)

  3-5 Year EPS CAGR

  ✗Lynch15-30% (Fast Grower); > 0% to pass

  ROE32.1%

  ✓Lynch> 15%

  EBIT / Enterprise Value1.1%

  ✗Greenblatt> 10%

  Earnings Yield + ROC AssessmentEY=1.1%, ROC=24.4%

  ✗GreenblattBoth EY > 10% and ROC > 25%

  Net Income / Total Assets2.08%

  ✓PiotroskiROA > 0

  ROA Change YoY-22.36% -> 2.08% (delta: +24.44%)

  ✓PiotroskiCurrent ROA > Prior ROA

  (CFO / Total Assets) vs ROACFO/Assets=4.22%, ROA=2.08%

  ✓PiotroskiCFO/Assets > ROA

  Gross Margin Change YoY

  ✗PiotroskiImproved YoY

  Pre-Tax Income / Revenue12.2%

  ✓Dreman>= 8%

  Net Income / Shareholders' Equity32.1%

  ✓Dreman> 12%

  Margin of SafetyP/E=204.0x, P/B=14.1x

  ✗PabraiP/B < 1.5 or P/E < 15

  Return on Equity-117.4% (3-yr avg)

  ✗AkreROE > 20% (3-year avg)

  Discount to Intrinsic ValueN/A (negative normalized EPS)

  ✗Marks>= 20% below intrinsic value

  Positive Net Income Frequency1/11 years positive

  ✗MarksPositive net income in >= 7 of last 10 years

  Operating Income / Revenue14.9%

  ✗Ackman>= 15%

  Net Income / Shareholders Equity32.1%

  ✓Ackman>= 15%

  5-Year EPS CAGR

  ✗Templeton> 0% (5-year EPS CAGR)

  Operating Margin Trend-130.4% (2023) -> 5.5% (2025)

  ✓TempletonNon-negative operating-margin trend over 3 years

  Revenue growth vs. gross and operating margin trendrevenue up, operating margin -130.4% -> 5.5%

  ✓SleepRevenue rising; gross margin flat or falling; operating margin holding

  Net income / market capitalization+2.56%; #2528/6340 (top 39.9%)

  ✗AsnessTop 30% of eligible cross-section✗OshaughnessyTop 10% of eligible cross-section

  Gross profit / total assets

  ✗AsnessTop 30% of eligible cross-section

  Net income / positive book equity+32.12%; #408/5226 (top 7.8%)

  ✓AsnessTop 30% of eligible cross-section

  Negative 5-year standard deviation of ROA-0.3531; #4708/5884 (top 80.0%)

  ✗AsnessTop 30% of eligible cross-section

  3-5 Year Diluted EPS CAGR

  ✗Neff7%-20% annualized

  Positive Diluted-EPS Years1/10 years positive

  ✗Schloss>= 70% positive over 5-10 observed years (app rule)
• Verdicts21% pass✓ 3✗ 11▾

  Split decision: 10 FAIL · 3 NEUTRAL · 3 PASS

  Overall verdict

  ✗GrahamFAIL (2/9)✗BuffettFAIL (1/9)✗LynchFAIL (2/7)✗GreenblattRank #1501•PiotroskiNEUTRAL (F-Score 6)✓DremanPASS (5/11)✗MungerFAIL (0/4)✗PabraiFAIL (0/3)✗AkreFAIL (1/6)✗MarksFAIL (0/5)✓AckmanPASS (5/9)✗TempletonFAIL (2/8)✓SleepPASS (3/6)•AsnessNEUTRAL (Not ranked)✗NeffFAIL (2/6)✗SchlossFAIL (2/7)•OshaughnessyNEUTRAL (Not ranked)
• Growth25% pass✓ 5✗ 8▾

  6 of 8 flag APLS's growth — Graham, Lynch, Dreman +3 more

  EPS Growth (3-yr avg, 10-yr window)N/A (negative base EPS)

  ✗Graham>= 33% growth

  Basic earnings-growth PEG (dividends excluded)P/E 204.0x (growth N/A)

  ✗Lynch< 1.0 (ideally < 0.5)

  3-5 Year EPS CAGR

  ✗Lynch15-30% (Fast Grower); > 0% to pass

  Inventory Growth vs Revenue GrowthInv: 59.3% vs Rev: 42.5%

  ✗LynchInventory growth < Revenue growth

  EPS Growth Direction$-8.03 (2015) -> $0.20 (2025)

  ✓DremanPositive over recent years

  EPS CAGR

  ✗Dreman> 5% annualized

  Positive Net Income Frequency1/11 years positive

  ✗MarksPositive net income in >= 7 of last 10 years

  3yr Median Revenue Growth97.0%

  ✓Ackman>= 5%

  Positive EPS Growth Frequency4/5 years with positive EPS growth

  ✓AckmanPositive EPS growth in >= 3 of last 5 years

  5-Year EPS CAGR

  ✗Templeton> 0% (5-year EPS CAGR)

  Revenue growth vs. gross and operating margin trendrevenue up, operating margin -130.4% -> 5.5%

  ✓SleepRevenue rising; gross margin flat or falling; operating margin holding

  5-year Revenue CAGR32.0%

  ✓SleepCAGR > 7%

  3-5 Year Diluted EPS CAGR

  ✗Neff7%-20% annualized
• Efficiency25% pass✓ 3✗ 8▾

  6 of 8 flag APLS's efficiency — Buffett, Greenblatt, Piotroski +3 more

  Current Ratio3.63

  ✓Graham>= 2.0

  ROIC (3-5 yr avg)-7710.5%

  ✗Buffett> 10%

  ROIC - WACC-7720.5%

  ✗BuffettPositive (WACC = 10%)

  EBIT / (NWC + Net Fixed Assets)24.4%

  ✗Greenblatt> 25%

  Current Ratio Change YoY4.25 -> 3.14

  ✗PiotroskiIncreased YoY

  Revenue / Total Assets Change YoY0.88x -> 0.93x

  ✓PiotroskiImproved YoY

  Current Assets / Current Liabilities3.63

  ✓Dreman> 1.5

  Return on Invested Capital15.0%

  ✗Munger> 15%

  ROIC (high and growing)FY2023: ROIC=-142.1%; FY2024: ROIC=-40.5%; FY2025: ROIC=9.4%

  ✗AkreLatest 3 consecutive FYs: ROIC > 15% in each

  Reinvestment Rate x ROIC9.4% (RR=100% x ROIC=9.4%)

  ✗AkreReinvestment Rate * ROIC > 10%

  ROIC (5-year)0/5 years above 12% (latest 9.4%)

  ✗SleepROIC > 12% in a majority of years
• Cash Flow30% pass✓ 4✗ 8▾

  7 of 10 flag APLS's cash flow — Buffett, Dreman, Pabrai +4 more

  Free Cash Flow Proxy

  ✗BuffettPositive and growing

  FCF Positive and Growing$45.0M

  ✓LynchPositive and growing

  Operating Cash Flow$45.3M

  ✓PiotroskiCFO > 0

  (CFO / Total Assets) vs ROACFO/Assets=4.22%, ROA=2.08%

  ✓PiotroskiCFO/Assets > ROA

  Price / (CFO / Shares)115.0x

  ✗Dreman< 8x

  P/E or FCF YieldP/E=204.0x, FCF Yield=0.9%

  ✗PabraiP/E < 15 or FCF Yield > 10%

  FCF Positive1/7 years FCF positive

  ✗MarksPositive FCF in majority of recent years

  (OCF - CapEx) / Market Cap0.9%

  ✗Ackman>= 4%

  Price / FCF per Share115.8x

  ✗Ackman<= 25

  Positive Operating Cash Flow frequency1/11 years positive

  ✗SleepPositive OCF in >= 70% of available years

  Operating Cash Flow - Capital Expenditures$45.0M

  ✓Neff> $0 (app proxy for a strong fundamental case)

  (Operating cash flow - capex) / market capitalization+0.86%; #2424/4519 (top 53.6%)

  ✗OshaughnessyTop 10% of eligible cross-section