Adaptive Biotechnologies (ADPT) AI Stock Analysis

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Adaptive Biotechnologies

(NASDAQ:ADPT)

42Neutral

Adaptive Biotechnologies faces significant challenges with profitability and cash flow despite revenue growth. Technical indicators show limited momentum, and valuation metrics reflect ongoing financial struggles. Positive aspects from the earnings call, such as MRD revenue growth and improved operational efficiency, provide some optimism, but overall risks remain high.

Positive Factors

Financial Performance

ADPT holds $256M of cash on the balance sheet, providing a solid financial position.

Market Expansion

Adaptive secures its first surveillance monitoring coverage win for clonoSEQ, which could signal similar expansion to other cancer types.

Regulatory Approval

ADPT is likely to convert more clinical trial customers to use its flagship clonoSEQ MRD test for primary endpoints following a highly positive FDA ODAC meeting vote.

Negative Factors

Business Segment Performance

Immune Medicine revenue decreased by 51% year over year, with a significant decline in Genentech amortization and lower pharma and academic services revenue.

Cash Burn Concerns

There were concerns about the cash burn from Adaptive Biotechnologies' Immune Medicine business.

Adaptive Biotechnologies (ADPT) vs. S&P 500 (SPY)

Market Cap

$1.17B

Dividend YieldN/A

Average Volume (3M)2.26M

Price to Earnings (P/E)―

Beta (1Y)1.91

Revenue Growth5.10%

EPS Growth30.45%

CountryUS

Employees619

SectorHealthcare

Sector Strength65

IndustryBiotechnology

Share Statistics

EPS (TTM)-1.08

Shares Outstanding148,582,200

10 Day Avg. Volume2,209,820

30 Day Avg. Volume2,257,560

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)7.04

Price to Cash Flow (P/CF)-11.50

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

$9.57

Price Target Upside21.29% Upside

Rating ConsensusStrong Buy

Number of Analyst Covering7

Adaptive Biotechnologies Business Overview & Revenue Model

Company DescriptionAdaptive Biotechnologies is a biotechnology company specializing in immune-driven medicine. The company operates in the healthcare sector, focusing on the development and commercialization of immunosequencing technologies that analyze the adaptive immune system. Its core products include immunoSEQ, a research platform, clonoSEQ, an FDA-cleared diagnostic test for minimal residual disease in blood cancers, and T-Detect, a diagnostic tool for infectious diseases and other conditions.

How the Company Makes MoneyAdaptive Biotechnologies generates revenue through the sale of its diagnostic and research products. The primary revenue streams include the licensing of its immunoSEQ platform to research institutions and pharmaceutical companies for immune system analysis, as well as the sales of its clonoSEQ diagnostic test, which is used by healthcare providers to monitor minimal residual disease in patients with blood cancers. Additionally, Adaptive Biotechnologies earns revenue through partnerships and collaborations with pharmaceutical companies for the development of new immunotherapies and other immune-driven treatments. These collaborations often involve milestone payments and royalties, contributing to the company's earnings.

Adaptive Biotechnologies Financial Statement Overview

Summary

Adaptive Biotechnologies shows revenue growth but struggles with profitability and cash flow, with negative EBIT, EBITDA margins, and free cash flow. High operating expenses and leverage are concerning, though the equity ratio indicates moderate financial stability.

Income Statement

Negative

Adaptive Biotechnologies has experienced revenue growth but is still challenged by significant losses. The gross profit margin has remained relatively stable, but the net profit margin remains negative due to high operating expenses. There are signs of modest revenue growth, yet the company continues to struggle with profitability, as shown by negative EBIT and EBITDA margins.

Balance Sheet

Neutral

The company's balance sheet shows a declining equity base and increasing debt levels, leading to a higher debt-to-equity ratio. The return on equity is negative due to ongoing net losses. Despite these challenges, the equity ratio remains above average, indicating a moderate capital structure with some level of financial stability.

Cash Flow

Negative

Adaptive Biotechnologies faces difficulties with cash flow, as indicated by negative free cash flow and operating cash flow. The operating cash flow to net income ratio is concerning, reflecting ongoing operational inefficiencies. The company needs to improve its cash generation capabilities to support long-term sustainability.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
178.96M	170.28M	185.31M	154.34M	98.38M
	Gross Profit
106.88M	94.72M	127.40M	105.04M	75.85M
	EBIT
-162.55M	-227.03M	-200.19M	-208.97M	-152.82M
	EBITDA
-128.76M	-189.27M	-167.98M	-193.34M	-144.34M
	Net Income Common Stockholders
-159.49M	-225.25M	-142.46M	-205.61M	-139.64M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
222.29M	346.40M	498.20M	353.06M	688.27M
	Total Assets
539.38M	661.13M	856.62M	923.34M	1.12B
	Total Debt
89.39M	229.43M	108.00M	111.74M	107.86M
	Net Debt
41.47M	164.37M	17.97M	-27.32M	-15.57M
	Total Liabilities
336.89M	352.86M	392.52M	319.24M	373.15M
	Stockholders Equity
202.71M	308.40M	464.17M	603.99M	743.27M
Cash Flow		Free Cash Flow
-98.88M	-167.02M	-200.29M	-254.47M	-168.49M
	Operating Cash Flow
-95.21M	-156.32M	-183.94M	-192.73M	-149.68M
	Investing Cash Flow
77.79M	129.65M	2.90M	181.21M	-117.04M
	Financing Cash Flow
241.00K	2.25M	132.26M	27.15M	293.59M

Adaptive Biotechnologies Technical Analysis

Technical Analysis Sentiment

Positive

Last Price7.89

Price Trends

50DMA

7.83

Positive

100DMA

7.35

Positive

200DMA

6.02

Positive

Market Momentum

MACD

-0.10

Positive

RSI

53.27

Neutral

STOCH

42.02

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ADPT, the sentiment is Positive. The current price of 7.89 is above the 20-day moving average (MA) of 7.63, above the 50-day MA of 7.83, and above the 200-day MA of 6.02, indicating a bullish trend. The MACD of -0.10 indicates Positive momentum. The RSI at 53.27 is Neutral, neither overbought nor oversold. The STOCH value of 42.02 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ADPT.

Adaptive Biotechnologies Risk Analysis

Adaptive Biotechnologies disclosed 75 risk factors in its most recent earnings report. Adaptive Biotechnologies reported the most risks in the “Tech & Innovation” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Adaptive Biotechnologies Peers Comparison

Overall Rating

UnderperformOutperform

Sector (51)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
IMCR	62 Neutral	$1.52B	―	-13.92%	―	24.19%	10.51%
Sector *	51 Neutral	$5.31B	3.33	-39.82%	2.92%	17.95%	1.84%
IOVA	48 Neutral	$1.10B	―	-57.48%	―	13698.99%	31.46%
SNDX	48 Neutral	$1.14B	―	-75.69%	―	―	-25.83%
ADPT	42 Neutral	$1.17B	―	-62.41%	―	5.10%	30.45%
ETNB	42 Neutral	$1.01B	―	-78.34%	―	―	-70.45%
PHVS	40 Underperform	$862.63M	―	-41.43%	―	―	0.71%

* Healthcare Sector Average

Performance Comparison

ADPT

Adaptive Biotechnologies

7.90

5.30

203.85%

IOVA

Iovance Biotherapeutics

3.51

-8.13

-69.85%

SNDX

Syndax Pharmaceuticals

13.33

-7.73

-36.70%

ETNB

89bio

6.94

-1.32

-15.98%

IMCR

Immunocore Holdings

30.16

-28.30

-48.41%

PHVS

Pharvaris

16.84

-6.51

-27.88%

Adaptive Biotechnologies Earnings Call Summary

Earnings Call Date: Feb 11, 2025 | % Change Since: 1.15% | Next Earnings Date: May 1, 2025

Earnings Call Sentiment Positive

The earnings call presented a positive view of Adaptive Biotechnologies' performance for 2024, highlighting significant growth in MRD revenue, improvements in operational efficiency, and a strong cash position. These positive developments were slightly offset by challenges in the immune medicine segment and a conservative outlook for MRD Pharma Services.

Highlights

MRD Revenue Growth

Revenue increased 42% versus 2023, driven by both clinical testing and pharma. This included a new gap fill rate for the clonoSEQ test and an ODAC vote supporting the use of MRD as a primary endpoint for multi myeloma therapies.

clonoSEQ Clinical Revenue and Test Volume Growth

Full year clonoSEQ clinical revenue grew 40% versus prior year, with a record high of 20,945 tests delivered in the fourth quarter, representing a 34% increase versus prior year.

Cash Position and Reduction in Cash Burn

Concluded the year with a cash position of $256 million and achieved a 40% reduction in cash burn from 2023.

Immune Medicine Progress

Significant progress in autoimmune programs with a nominated lead clinical indication and a focus on preclinical development of an antibody therapeutic candidate.

Operational Efficiency and Cost Management

Improved sequencing gross margin to 59% for the fourth quarter, total operating spend decreased by 11% year-over-year.

Lowlights

Decline in Immune Medicine Revenue

Immune medicine revenue was $7.3 million, down 51% from a year ago, driven by lower Genentech amortization and lower pharma and academic services.

Conservative Outlook for MRD Pharma Services

MRD Pharma Services growth is expected to be conservative due to new administration and broader impacts from the biopharma industry.

Company Guidance

During Adaptive Biotechnologies' Q4 and full-year 2024 earnings call, the company reported significant progress and financial metrics. MRD (Minimal Residual Disease) revenue increased by 42% compared to 2023, driven by a new gap fill rate for clonoSEQ tests set at $2,007, and the ODAC's favorable vote for MRD as a primary endpoint in multiple myeloma therapies. ClonoSEQ's clinical revenue grew 40% year-over-year, with a record 20,945 tests delivered in Q4, marking a 34% increase. Blood-based MRD testing rose by 55%, contributing to 41% of U.S. tests, while ordering healthcare providers grew by 30%. The company reported a robust cash position of $256 million at year-end and aims for an ASP of $1,300 per test in 2025, with MRD revenue projected to grow 24-30%. The guidance reflects a strategic focus on expanding blood-based testing, further integration with EPIC accounts, and leveraging commercial partnerships like the one with NeoGenomics.

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.