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Zai Lab (ZLAB)
NASDAQ:ZLAB
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Zai Lab
(NASDAQ:ZLAB)
59Neutral
Positive Factors
Future Growth Potential
Management provided an optimistic revenue guidance for 2025, expecting a 40.4%-47.9% year-over-year increase, indicating strong growth potential.
Product Sales
VYVGART showed an impressive sales ramp-up, significantly contributing to the company's overall revenue growth.
Revenue Growth
Zai Lab registered a significant increase in total revenue by 49.6%, aligning with the forecast and driven by the ramp-up of VYVGART.
Negative Factors
Competition
Rising competition for its core product is expected to offset the benefits of new product launches.
Core Product Performance
Some core products like Zejula and Optune have seen soft performance, impacting overall growth.
Stock Price Limitation
Recent positive news and product approvals have already been factored into the stock price, limiting short-term upside potential.
Zai Lab (ZLAB) vs. S&P 500 (SPY)
Market Cap
$3.06B
Dividend YieldN/A
Average Volume (3M)1.17M
Price to Earnings (P/E)―
Beta (1Y)1.11
Revenue Growth49.59%
EPS Growth24.92%
CountryUS
Employees1,869
SectorHealthcare
Sector Strength74
IndustryBiotechnology
Share Statistics
EPS (TTM)-2.60
Shares Outstanding110,128,370
10 Day Avg. Volume1,354,038
30 Day Avg. Volume1,171,965
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)9.51
Price to Cash Flow (P/CF)-17.00
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$54.03Price Target Upside99.67% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering5
Zai Lab Business Overview & Revenue Model
Company DescriptionZai Lab Limited develops and commercializes therapies to treat oncology, autoimmune disorders, infectious diseases, and neuroscience primarily in Mainland China and Hong Kong. The company's commercial products include Zejula, a once-daily small-molecule poly polymerase 1/2 inhibitor; Optune, a device that delivers tumor treating fields; NUZYRA for acute bacterial skin and skin structure infections, and community acquired bacterial pneumonia; and Qinlock to treat gastrointestinal stromal tumors. It also develops Odronextamab to treat follicular lymphoma, diffuse large B-cell lymphoma, and other B-celllymphomas; Repotrectinib, a tyrosine kinase inhibitor (TKI) to target ROS1 and TRK A/B/C in TKI-naïve- or -pretreated cancer patients; Margetuximab for the treatment of breast and gastroesophageal cancers; Adagrasib for treating KRAS-G12C-mutated NSCLC, colorectal cancer, pancreatic cancer, and other solid tumors; and Bemarituzumab to treat gastric and gastroesophageal junction cancer. In addition, the company develops CLN-081 for the treatment of patients with EGFR exon 20 insertion NSCLC; Elzovantinib, an orally bioavailable multi-targeted kinase inhibitor; Tebotelimab, a tetravalent IgG4 monoclonal antibody; Retifanlimab that inhibits interactions between PD-1 and its ligands; ZL-2309, an orally active, selective, and ATP-competitive cell division cycle 7 (CDC7) kinase inhibitor; ZL-1201, a humanized IgG4 monoclonal antibody; Efgartigimod to reduce disease-causing immunoglobulin G antibodies; ZL-1102, a human nanobody targeting interleukin- 17A; KarXT for the treatment of psychiatric and neurological conditions; ZL-2313, an investigational inhibitor of triple-mutant EGFR harboring; ZL-2314, an investigational inhibitor of double-mutant EGFR harboring; and Sulbactam/durlobactam for the treatment of serious infections caused by Acinetobacter. Zai Lab Limited was incorporated in 2013 and is headquartered in Shanghai, China.
How the Company Makes MoneyZai Lab makes money through the development, commercialization, and sales of its pharmaceutical products. The company's revenue model includes income generated from the sale of drugs and therapies, primarily in the areas of oncology, autoimmune disorders, and infectious diseases. Additionally, Zai Lab engages in strategic collaborations and partnerships with global pharmaceutical companies, which provide upfront payments, milestone payments, and royalties. These partnerships are crucial for accessing advanced technologies and expanding the company's product pipeline, thereby contributing significantly to its revenue streams.
Zai Lab Financial Statement Overview
Summary
Zai Lab exhibits strong revenue growth but faces profitability and cash flow challenges. The balance sheet is stable with low leverage, a positive in the capital-intensive biotech industry. However, ongoing losses and negative cash flows raise concerns about achieving sustainable profitability. Continued reliance on external financing could be risky if positive cash flows and net income aren't achieved.Income Statement
Zai Lab has shown consistent revenue growth over the years, with a significant increase from $12.98 million in 2019 to $398.99 million in 2024, reflecting a strong upward trajectory. However, the company is still facing considerable losses, with negative EBIT and net income margins, indicating ongoing profitability challenges. The net profit margin remains in negative territory, at -64.45% for 2024, suggesting that the company is still struggling to turn its revenue growth into profitability.40
Negative
Balance Sheet
The balance sheet shows a stable equity position with stockholders' equity of $840.90 million in 2024. The debt-to-equity ratio is low at 0.18, indicating low leverage and financial stability. However, the return on equity is negative due to the company's ongoing losses, which is a concern for long-term profitability. The equity ratio remains strong at 70.93%, reflecting a solid asset base funded by equity.55
Neutral
Cash Flow
The company has demonstrated some improvements in free cash flow, but it remains negative at -$220.53 million in 2024. Operating cash flow has improved slightly but is still negative, showing that the company is not yet generating positive cash from its operations. The cash flow from financing activities is positive, indicating that the company has been able to raise funds, but reliance on external funding is significant. The free cash flow to net income ratio is unfavorable due to the negative net income.45
Neutral
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 398.99M | 266.72M | 215.04M | 144.31M | 48.96M | Gross Profit |
| 251.13M | 170.90M | 141.02M | 92.07M | 32.22M | EBIT |
| -282.12M | -366.57M | -404.36M | -700.06M | -301.80M | EBITDA |
| -242.99M | -365.11M | -384.66M | -689.46M | -262.96M | Net Income Common Stockholders |
| -257.10M | -334.62M | -481.99M | -692.44M | -298.16M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 779.67M | 806.45M | 1.01B | 1.41B | 1.19B | Total Assets |
| 1.19B | 1.04B | 1.22B | 1.61B | 1.30B | Total Debt |
| 153.47M | 15.15M | 20.39M | 15.54M | 18.60M | Net Debt |
| -296.20M | -775.00M | -988.08M | -948.56M | -423.52M | Total Liabilities |
| 344.86M | 240.18M | 174.54M | 230.00M | 128.29M | Stockholders Equity |
| 840.90M | 796.12M | 1.05B | 1.38B | 1.17B |
| Cash Flow | Free Cash Flow | |||
| -276.39M | -206.67M | -392.63M | -568.18M | -226.72M | Operating Cash Flow |
| -214.87M | -198.18M | -367.64M | -549.23M | -216.06M | Investing Cash Flow |
| -375.19M | -10.78M | 420.02M | 249.96M | -554.83M | Financing Cash Flow |
| 349.89M | -6.43M | -1.73M | 820.20M | 1.13B |
Zai Lab Technical Analysis
Negative
27.06
Price Trends
32.73
Negative
29.69
Negative
25.73
Positive
Market Momentum
1.12
Positive
58.36
Neutral
55.54
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ZLAB, the sentiment is Negative. The current price of 27.06 is below the 20-day moving average (MA) of 35.04, below the 50-day MA of 32.73, and above the 200-day MA of 25.73, indicating a neutral trend. The MACD of 1.12 indicates Positive momentum. The RSI at 58.36 is Neutral, neither overbought nor oversold. The STOCH value of 55.54 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ZLAB.
Zai Lab Risk Analysis
Zai Lab disclosed 100 risk factors in its most recent earnings report. Zai Lab reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Zai Lab Peers Comparison
Overall Rating
UnderperformOutperform
Sector (48)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $5.40B | 26.73 | 14.99% | ― | 16.17% | -17.16% | |
64 Neutral | $4.66B | 13.82 | 5.49% | ― | 0.50% | ― | |
61 Neutral | $2.90B | 63.02 | 10.45% | ― | 4.88% | -13.56% | |
59 Neutral | $3.06B | ― | -31.41% | ― | 49.59% | 24.92% | |
53 Neutral | $3.06B | ― | -33.47% | ― | 13.99% | 0.17% | |
48 Neutral | $6.36B | 1.24 | -44.94% | 2.70% | 18.33% | 1.47% | |
42 Neutral | $3.38B | ― | 33.08% | ― | -13.97% | 43.51% |
* Healthcare Sector Average
Performance Comparison
ZLAB
Zai Lab
27.06
11.66
75.71%
OPCH
Option Care Health
33.56
2.18
6.95%
PTCT
PTC Therapeutics
42.75
15.84
58.86%
ELAN
Elanco Animal Health
9.38
-5.37
-36.41%
RNA
Avidity Biosciences
24.80
-0.84
-3.28%
SHC
Sotera Health
11.32
-0.10
-0.88%
Zai Lab Earnings Call Summary
Earnings Call Date: Feb 27, 2025 | % Change Since: -22.84% | Next Earnings Date: May 13, 2025
Earnings Call Sentiment Positive
The earnings call reflects a positive sentiment with strong revenue growth, successful product launches, and pipeline advancements. Despite some challenges, such as limited immediate impact from certain product launches and competitive pressures, the company is on track towards profitability and maintains a strong cash position.Highlights
Record Revenue Growth
Total revenue for 2024 grew 50% year-on-year, with a 66% growth in the fourth quarter. Full-year revenue was $399 million.
Successful Launches and Product Performance
VYVGART generated $93.6 million in sales in its first year, with fourth quarter sales of $30 million. New products like VYVGART Hytrulo, AUGTYRO, and XACDURO were launched successfully.
Pipeline Advancements
Significant progress in the pipeline, including positive data readouts for KarXT, Tumor Treating Fields, and TIVDAK. Regulatory submissions and approvals are on track for multiple products.
Cost Efficiency and Profitability Outlook
Loss from operations improved by 45% in Q4 and 23% for the full year. The company is on track to reach profitability by Q4 2025.
Strong Cash Position
The company maintains a robust cash position of $879.7 million to support future growth.
Lowlights
Limited Immediate Impact of CIDP and Hytrulo Launches
VYVGART Hytrulo and CIDP are not listed on the NRDL for 2025, leading to limited market impact due to reliance on supplemental insurance or cash payments.
Competitive Landscape for DLL3
DLL3 faces competition from other advanced therapies, such as tarlatamab, which may impact market dynamics.
Company Guidance
During the call, Zai Lab provided detailed guidance on its performance and expectations. For 2025, the company anticipates total revenues to be between $560 million and $590 million, reflecting strong growth from products such as VYVGART, ZEJULA, and NUZYRA. The company reported a 66% increase in fourth-quarter revenue to $109.1 million and a 50% rise for the full year, totaling $399 million. VYVGART, which generated $93.6 million in 2024, is expected to drive significant growth, with new formulations and approvals anticipated to enhance its market penetration. Zai Lab aims to achieve profitability by the fourth quarter of 2025, driven by operational efficiencies that have already resulted in a 45% reduction in fourth-quarter operational loss and a 23% decrease for the full year. The company maintains a robust cash position of $879.7 million to support its growth strategy, including advancing its pipeline and launching new products.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.