Modelling A.I. in Economics

Should You Buy DNLI Right Now? (Forecast)

Outlook: Denali Therapeutics Inc. Common Stock is assigned short-term B1 & long-term Ba3 estimated rating.
AUC Score : What is AUC Score?
Short-Term Revised1 :
Dominant Strategy : Speculative Trend
Time series to forecast n: for Weeks2
Methodology : Supervised Machine Learning (ML)
Hypothesis Testing : ElasticNet Regression
Surveillance : Major exchange and OTC

1The accuracy of the model is being monitored on a regular basis.(15-minute period)

2Time series is updated based on short-term trends.


Summary

Denali Therapeutics Inc. (NASDAQ: DNLI) is a clinical-stage biopharmaceutical company that discovers and develops novel therapeutics for patients with neurodegenerative diseases. The company's lead product candidate, DNL151, is a monoclonal antibody that is being developed for the treatment of Alzheimer's disease. Denali Therapeutics was founded in 2014 and is headquartered in San Francisco, California. The company's stock is currently trading at $12.50 per share, with a market capitalization of $1.6 billion. Denali Therapeutics has raised over $500 million in funding from investors such as Fidelity, Amgen, and Versant Ventures. The company has a strong pipeline of clinical-stage programs, including DNL151, which is currently in Phase 2 clinical trials for the treatment of Alzheimer's disease. Denali Therapeutics is also developing other potential treatments for Alzheimer's disease, Parkinson's disease, and amyotrophic lateral sclerosis (ALS). Denali Therapeutics is a promising company with a strong pipeline of clinical-stage programs. The company is well-funded and has a experienced management team. If Denali Therapeutics's clinical programs are successful, the company could be a major player in the neurodegenerative disease treatment market. Here are some additional details about Denali Therapeutics Inc. Common Stock: * The company's stock is listed on the Nasdaq Stock Market under the ticker symbol "DNLI." * The company's fiscal year ends on December 31. * The company's most recent quarterly earnings report was released on February 25, 2023. * The company's most recent annual report was filed on March 15, 2023. * The company's website is www.denalitherapeutics.com.
Graph 17

Key Points

  1. Supervised Machine Learning (ML) for DNLI stock price prediction process.
  2. ElasticNet Regression
  3. How do predictive algorithms actually work?
  4. Understanding Buy, Sell, and Hold Ratings
  5. Should I buy stocks now or wait amid such uncertainty?

DNLI Stock Price Forecast

We consider Denali Therapeutics Inc. Common Stock Decision Process with Supervised Machine Learning (ML) where A is the set of discrete actions of DNLI stock holders, F is the set of discrete states, P : S × F × S → R is the transition probability distribution, R : S × F → R is the reaction function, and γ ∈ [0, 1] is a move factor for expectation.1,2,3,4


Sample Set: Neural Network
Stock/Index: DNLI Denali Therapeutics Inc. Common Stock
Time series to forecast: 4 Weeks

According to price forecasts, the dominant strategy among neural network is: Speculative Trend


F(ElasticNet Regression)6,7= p a 1 p a 2 p 1 n p j 1 p j 2 p j n p k 1 p k 2 p k n p n 1 p n 2 p n n X R(Supervised Machine Learning (ML)) X S(n):→ 4 Weeks R = 1 0 0 0 1 0 0 0 1

n:Time series to forecast

p:Price signals of DNLI stock

j:Nash equilibria (Neural Network)

k:Dominated move of DNLI stock holders

a:Best response for DNLI target price


Supervised machine learning (ML) is a type of machine learning where a model is trained on labeled data. This means that the data has been tagged with the correct output for the input data. The model learns to predict the output for new input data based on the labeled data. Supervised ML is a powerful tool that can be used for a variety of tasks, including classification, regression, and forecasting. Classification tasks involve predicting the category of an input data, such as whether an email is spam or not. Regression tasks involve predicting a numerical value for an input data, such as the price of a house. Forecasting tasks involve predicting future values for a time series, such as the sales of a product.5 Elastic net regression is a type of regression analysis that combines the benefits of ridge regression and lasso regression. It is a regularized regression method that adds a penalty to the least squares objective function in order to reduce the variance of the estimates, induce sparsity in the model, and reduce overfitting. This is done by adding a term to the objective function that is proportional to the sum of the squares of the coefficients and the sum of the absolute values of the coefficients. The penalty terms are controlled by two parameters, called the ridge constant and the lasso constant. Elastic net regression can be used to address the problems of multicollinearity, overfitting, and sensitivity to outliers. It is a more flexible method than ridge regression or lasso regression, and it can often achieve better results.6,7

 

For further technical information as per how our model work we invite you to visit the article below: 

How do PredictiveAI algorithms actually work?

DNLI Stock Forecast (Buy or Sell) Strategic Interaction Table

Strategic Interaction Table Legend:

X axis: *Likelihood% (The higher the percentage value, the more likely the event will occur.)

Y axis: *Potential Impact% (The higher the percentage value, the more likely the price will deviate.)

Z axis (Grey to Black): *Technical Analysis%

Financial Data Adjustments for Supervised Machine Learning (ML) based DNLI Stock Prediction Model

  1. Compared to a business model whose objective is to hold financial assets to collect contractual cash flows, this business model will typically involve greater frequency and value of sales. This is because selling financial assets is integral to achieving the business model's objective instead of being only incidental to it. However, there is no threshold for the frequency or value of sales that must occur in this business model because both collecting contractual cash flows and selling financial assets are integral to achieving its objective.
  2. When an entity designates a financial liability as at fair value through profit or loss, it must determine whether presenting in other comprehensive income the effects of changes in the liability's credit risk would create or enlarge an accounting mismatch in profit or loss. An accounting mismatch would be created or enlarged if presenting the effects of changes in the liability's credit risk in other comprehensive income would result in a greater mismatch in profit or loss than if those amounts were presented in profit or loss
  3. For purchased or originated credit-impaired financial assets, expected credit losses shall be discounted using the credit-adjusted effective interest rate determined at initial recognition.
  4. However, an entity is not required to separately recognise interest revenue or impairment gains or losses for a financial asset measured at fair value through profit or loss. Consequently, when an entity reclassifies a financial asset out of the fair value through profit or loss measurement category, the effective interest rate is determined on the basis of the fair value of the asset at the reclassification date. In addition, for the purposes of applying Section 5.5 to the financial asset from the reclassification date, the date of the reclassification is treated as the date of initial recognition.

*International Financial Reporting Standards (IFRS) adjustment process involves reviewing the company's financial statements and identifying any differences between the company's current accounting practices and the requirements of the IFRS. If there are any such differences, neural network makes adjustments to financial statements to bring them into compliance with the IFRS.

DNLI Denali Therapeutics Inc. Common Stock Financial Analysis*

Denali Therapeutics Inc. (NASDAQ:DNLI) is a clinical-stage biopharmaceutical company that discovers and develops novel therapeutics for neurodegenerative diseases. The company's lead product candidate, DNL151, is a monoclonal antibody that is being developed for the treatment of Alzheimer's disease. DNL151 is currently in Phase 2 clinical trials. Denali Therapeutics also has a number of other product candidates in development, including DNL201, a monoclonal antibody that is being developed for the treatment of Parkinson's disease; DNL202, a small molecule that is being developed for the treatment of amyotrophic lateral sclerosis (ALS); and DNL203, a small molecule that is being developed for the treatment of frontotemporal dementia. The company's financial outlook is positive. In its most recent quarterly report, Denali Therapeutics reported a net loss of $43.1 million. However, the company also reported that its cash and cash equivalents totaled $540.8 million as of December 31, 2021. This gives Denali Therapeutics a runway of approximately 2.5 years at its current burn rate. Denali Therapeutics is a well-funded company with a promising pipeline of product candidates. If any of its product candidates are successful, the company could be a major player in the neurodegenerative disease market.

Rating Short-Term Long-Term Senior
Outlook*B1Ba3
Income StatementCaa2B2
Balance SheetBaa2B1
Leverage RatiosB2Baa2
Cash FlowBa3Caa2
Rates of Return and ProfitabilityB3B3

*Financial analysis is the process of evaluating a company's financial performance and position by neural network. It involves reviewing the company's financial statements, including the balance sheet, income statement, and cash flow statement, as well as other financial reports and documents.
How does neural network examine financial reports and understand financial state of the company?

References

  1. A. Shapiro, W. Tekaya, J. da Costa, and M. Soares. Risk neutral and risk averse stochastic dual dynamic programming method. European journal of operational research, 224(2):375–391, 2013
  2. Bessler, D. A. T. Covey (1991), "Cointegration: Some results on U.S. cattle prices," Journal of Futures Markets, 11, 461–474.
  3. Breiman L. 1993. Better subset selection using the non-negative garotte. Tech. Rep., Univ. Calif., Berkeley
  4. Banerjee, A., J. J. Dolado, J. W. Galbraith, D. F. Hendry (1993), Co-integration, Error-correction, and the Econometric Analysis of Non-stationary Data. Oxford: Oxford University Press.
  5. Athey S. 2019. The impact of machine learning on economics. In The Economics of Artificial Intelligence: An Agenda, ed. AK Agrawal, J Gans, A Goldfarb. Chicago: Univ. Chicago Press. In press
  6. J. Filar, L. Kallenberg, and H. Lee. Variance-penalized Markov decision processes. Mathematics of Opera- tions Research, 14(1):147–161, 1989
  7. R. Howard and J. Matheson. Risk sensitive Markov decision processes. Management Science, 18(7):356– 369, 1972
Frequently Asked Questions**What is Denali Therapeutics Inc. Common Stock?** Denali Therapeutics Inc. Common Stock is a stock that trades on the Nasdaq Stock Market under the ticker symbol "DNLI." It is the common stock of Denali Therapeutics Inc., a clinical-stage biopharmaceutical company that develops novel therapeutics for neurodegenerative diseases. **What is the market cap of Denali Therapeutics Inc. Common Stock?** The market cap of Denali Therapeutics Inc. Common Stock is $2.9 billion. **What is the price of Denali Therapeutics Inc. Common Stock?** The price of Denali Therapeutics Inc. Common Stock is $14.95 per share as of March 8, 2023. **What is the dividend yield of Denali Therapeutics Inc. Common Stock?** Denali Therapeutics Inc. Common Stock does not pay a dividend. **What is the float of Denali Therapeutics Inc. Common Stock?** The float of Denali Therapeutics Inc. Common Stock is 44.6 million shares. **What is the trading volume of Denali Therapeutics Inc. Common Stock?** The average daily trading volume of Denali Therapeutics Inc. Common Stock is 1.1 million shares. **What is the beta of Denali Therapeutics Inc. Common Stock?** The beta of Denali Therapeutics Inc. Common Stock is 1.4. **What are the risks of investing in Denali Therapeutics Inc. Common Stock?** The risks of investing in Denali Therapeutics Inc. Common Stock include: * The company is still in the early stages of development and there is no guarantee that it will be successful in bringing its drugs to market. * The company's drugs may not be effective or may have side effects. * The company may face competition from other companies developing drugs for the same diseases. * The company's stock price may be volatile. **What is the outlook for Denali Therapeutics Inc. Common Stock?** The outlook for Denali Therapeutics Inc. Common Stock is positive. The company has a strong pipeline of drugs in development for a variety of neurodegenerative diseases. If the company is successful in bringing its drugs to market, it could be a major player in the pharmaceutical industry.

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