CORT, Corcept Therapeutics Incorporated

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? +$372M
  Net cash, debt-free
  Cash $120M + ST investments $252M − debt $0
  What this means

  Cash and short-term investments exceed every dollar of debt by $372M, on net the company owes nothing, and can act from strength when others can't. It also holds $160M in longer-dated marketable securities; counting those, it sits at net cash of $532M. 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? -747d
  Negative, funded by others
  DSO 29 + DIO 362 − DPO 1138 days
  What this means

  Days cash is tied up between paying suppliers and collecting from customers. A negative cycle is a quiet moat: suppliers and customers fund the operation (Buffett's “float”), the company grows on other people's money.

Is it a good business?

• Return on invested capital 25%
  High through the cycle
  9-yr median, range 8%–38%; 8% latest = NOPAT $45M ÷ invested capital $527M
  Industry peers: median 6%
  What this means

  The rate the business earns on the money tied up in it, Buffett's north star, because over time a stock tracks the ROIC beneath it. Above ~15% sustained hints at a moat; a return below the cost of capital (~8%) erodes value as a business grows rather than building it — the test Buffett weighs most. The headline is the median of the last 9 years (it ran 8% most recently), so one peak or trough year doesn't set the verdict. Asset-light businesses (R&D expensed, little capital) read artificially high, pair this with Owner Earnings.

• Owner-earnings margin 34%
  High through the cycle
  10-yr median margin, range 19%–46%; latest $142M = operating cash $142M − maintenance capex $211K
  Industry peers: median 8%
  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. That's 19% of revenue this year, a 34% median across 10 years. Treating stock comp as the real expense it is (less $85M of SBC) leaves $57M.

• Are earnings backed by cash? 1.42×
  Cash-backed
  Cash from ops $142M ÷ net income $100M
  What this means

  How much of reported profit showed up as operating cash. Above 1× is reassuring; well below suggests earnings lean on accruals. One year is noisy, growth and working-capital swings distort it, and this is operating cash, not free cash. Watch the multi-year trend.

How is the cash used?

• Where do the earnings go? 122%
  Returned more than it generated
  Dividends + buybacks $173M ÷ Owner Earnings $142M — this fiscal year
  What this means

  The company returned more than it generated: against $142M of Owner Earnings, $173M (122%) went back to shareholders, $0 dividends, $173M buybacks — the excess came from the balance sheet or borrowing, not the year's operations. Net of $85M stock comp, the real buyback was about $88M. Sustained, that pattern draws down cash or adds debt; the net-debt line above shows where it stands. This year's proportion is 122%; across the record (2016–2025) it is 21%, the capital-allocation section below.

• Investing or harvesting? 0.18×
  Harvesting
  Capex $211K ÷ depreciation & amortization as filed $1M
  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.

The promise and the pay packet

• Is the buyback buying ownership, or mopping up? 11.1%
  The count is rising
  Stock compensation $85M (fiscal 2025), 11.1% of revenue · repurchases $173M · diluted shares +3.5% since 2022
  What this means

  Stock handed to employees is a real cost paid in the owner's own currency: it is charged against profit, but the shares it creates are permanent. Many companies repurchase stock at the same time, which looks like a return of capital and often is not — if the count barely moves, the cash merely cancelled the pay packet and bought the owner nothing. The three states worth telling apart are a count genuinely shrinking, a count standing still despite large repurchases, and a count rising because the issuance was never offset at all.

Graham’s defensive tests · 4 of 5 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 · $761M
  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× · 2.92×
  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.

• Conservative debt Pass
  Debt ≤ working capital · $0 vs $319M WC
  What this means

  Graham's rule that borrowings not exceed net current assets. Capital-heavy and buyback-heavy firms routinely fail it, read it next to interest coverage, not alone.

• Earnings stability Pass
  A profit every year (10-yr record) · no losses
  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 Pass
  Earnings +33% over the record · +63%
  What this means

  At least a third more earnings than a decade ago, averaging three years at each end. Net income (not per-share), so stock splits don't distort it, buybacks and dilution show up in the share-count line instead.

• 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 $1.07/share (latest year $0.92), the averaged base the calculator's gate runs on, and book value is $5.99/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 10 of 10
  What this means

  Never lost money over the record, the earnings stability Graham insisted on.

• Operating margin 27% → 16% (3-yr avg ends)

  In the filing’s words The filing attributes gains to higher prices but names price competition too — and the margin slipped, so the pressure is winning here.

  What this means

  Through the cycle the operating margin slipped — about 27% early to 16% lately, median 28% — competition or costs are biting in.

• Reinvestment, incremental ROIC returns capital
  What this means

  The capital base barely grew: this business returns cash through dividends and buybacks rather than reinvesting. Judge it on the cash returned, not on compounding.

• Owner earnings growth +18%/yr
  What this means

  Owner earnings grew about 18% a year over the record.

• Worst year 2025 · 5.9% op. margin
  What this means

  Stayed profitable even in its hardest year, the resilience that survives recessions.

• Share count +0.4%/yr
  What this means

  Roughly flat share count, little dilution, little buyback.