Alector (ALEC) AI Stock Analysis

• Market Cap: $89.60M
• Dividend Yield: N/A
• Average Volume (3M): 747.62K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.38
• Revenue Growth: 3.60%
• EPS Growth: 20.41%
• Country: US
• Employees: 238
• Sector: Healthcare
• Sector Strength: 69
• Industry: Biotechnology
• EPS (TTM): -1.24
• Shares Outstanding: 99,085,890
• 10 Day Avg. Volume: 697,032
• 30 Day Avg. Volume: 747,619
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 1.33
• Price to Cash Flow (P/CF): -0.60
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $4.50
• Price Target Upside: 373.68% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 6

Alector's overall stock score reflects significant financial challenges and weak technical indicators, partially offset by positive clinical trial progress and a solid cash position. The company's ongoing losses and reliance on debt are key risks, while potential future developments in clinical programs provide a glimmer of hope. However, current financial and valuation metrics suggest caution.

Positive Factors

Clinical trial success

Results from the open-label Phase II INFRONT-2 study showed a 48% slowing of disease relative to an external matched control cohort.

Financial stability

The company reported cash through 2026, indicating strong financial stability.

Technological advancement

Alector Brain Carrier (ABC) shuttle programs are very focused and have been highlighted as essential technology.

Negative Factors

Competitive landscape

Crowding and competition are expected to be an issue in Alector's efforts.

Financial risk

FY25 net cash loss continues to be aggressive given extensive R&D and manufacturing platform.

Stock performance outlook

Alector is assumed at an Underweight rating, indicating a cautious outlook on the stock's performance.

Alector Business Overview & Revenue Model

Company Description

Alector (ALEC) is a biotechnology company focused on developing therapies for neurodegenerative diseases. The company's core approach involves leveraging the immune system to tackle brain disorders such as Alzheimer's disease and frontotemporal dementia. Alector's pipeline includes several monoclonal antibodies and small molecules designed to modulate neuroimmune targets, aiming to halt or reverse the progression of these debilitating conditions.

How the Company Makes Money

Alector generates revenue primarily through strategic collaborations and partnerships with larger pharmaceutical companies. These agreements often involve upfront payments, milestone payments based on the achievement of specific developmental, regulatory, and commercial objectives, and potential royalties on future sales of successful therapeutics. Additionally, Alector may receive research and development funding as part of these collaborations, helping to finance its ongoing clinical trials and drug development efforts.

Alector Financial Statement Overview

Summary

Alector's financial statements depict a company facing substantial challenges in profitability, revenue growth, and cash flow management. While the balance sheet remains moderately stable, the overall financial health is concerning due to persistent losses and reliance on debt. The company needs strategic initiatives to improve operational efficiency and financial performance to achieve long-term sustainability.

Income Statement

Alector's income statement reveals consistent losses with declining revenue over recent years. The gross profit margin is volatile, indicating unstable cost management. The net profit margin is negative, reflecting ongoing unprofitability. Revenue growth rate is negative, highlighting shrinking sales. The company struggles with EBIT and EBITDA margins, displaying operating inefficiencies. Overall, Alector's income statement shows significant challenges in achieving profitability and revenue growth.

Balance Sheet

Alector's balance sheet shows a relatively high debt-to-equity ratio, indicating reliance on debt financing. The return on equity is negative due to net losses, signaling challenges in generating shareholder value. The equity ratio is moderate, suggesting a balanced capital structure. However, the diminishing equity over time points to eroding financial strength. While the company maintains a reasonable level of assets, financial stability remains a concern.

Cash Flow

The cash flow statement highlights Alector's negative free cash flow growth rate, reflecting ongoing cash burn without significant improvement. The operating cash flow to net income ratio is negative, indicating insufficient cash generation from core operations. Free cash flow to net income ratio is also negative, underscoring inefficiencies in converting earnings into cash. Alector faces significant challenges in managing cash flows sustainably.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
100.56M	97.06M	133.62M	207.09M	21.10M
	Gross Profit
100.56M	-95.05M	125.14M	17.68M	-135.77M
	EBIT
-145.00M	-151.74M	-137.83M	-37.36M	-195.17M
	EBITDA
-145.00M	-142.89M	-129.36M	-29.05M	-187.91M
	Net Income Common Stockholders
-119.05M	-130.39M	-133.31M	-28.01M	-182.96M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
413.40M	548.86M	712.85M	735.25M	413.31M
	Total Assets
468.30M	621.83M	787.65M	814.66M	488.25M
	Total Debt
42.52M	38.92M	43.33M	47.60M	51.26M
	Net Debt
9.50M	-35.64M	-111.00M	-281.55M	1.29M
	Total Liabilities
341.50M	487.67M	573.21M	513.93M	220.72M
	Stockholders Equity
126.80M	134.16M	214.44M	300.72M	267.53M
Cash Flow		Free Cash Flow
-231.16M	-186.54M	-24.45M	295.30M	-171.77M
	Operating Cash Flow
-229.91M	-184.16M	-20.33M	298.55M	-166.73M
	Investing Cash Flow
107.13M	101.92M	-159.01M	-49.66M	-105.05M
	Financing Cash Flow
81.54M	2.55M	4.51M	30.30M	232.11M

Alector Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 0.95
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ALEC, the sentiment is Negative. The current price of 0.95 is below the 20-day moving average (MA) of 1.18, below the 50-day MA of 1.46, and below the 200-day MA of 3.52, indicating a bearish trend. The MACD of -0.11 indicates Positive momentum. The RSI at 31.34 is Neutral, neither overbought nor oversold. The STOCH value of 11.77 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ALEC.

Alector Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
BIIB	65 Neutral	$16.86B	10.30	10.36%	―	-1.60%	39.71%
ALNY	50 Neutral	$29.43B	―	-414.62%	―	22.97%	38.54%
IONS	49 Neutral	$4.44B	―	-93.03%	―	-10.48%	-18.79%
Sector *	48 Neutral	$6.35B	1.19	-46.26%	2.67%	19.24%	1.75%
PRTA	47 Neutral	$550.11M	―	-23.34%	―	47.92%	17.84%
ALEC	45 Neutral	$89.60M	―	-91.24%	―	3.60%	20.41%
DNLI	41 Neutral	$1.82B	―	-37.40%	―	-100.00%	-144.79%

Alector Corporate Events

Alector Announces Resignation of Chief Medical Officer

On March 25, 2025, Alector, Inc. announced the resignation of Dr. Gary Romano from his role as Chief Medical Officer, effective April 25, 2025. Dr. Romano, who has been with the company since May 2022, is leaving to pursue other opportunities, and the company expressed gratitude for his contributions.