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Alector Inc (ALEC)
NASDAQ:ALEC
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Alector
(NASDAQ:ALEC)
47Neutral
Positive Factors
Commercial Potential
The near 100% penetrance for developing FTD-GRN following PGRN mutations suggests a direct causal link, positioning PGRN-targeting latozinemab for meaningful commercial upside.
Financial Stability
The company reported cash through 2026, indicating strong financial stability.
Research and Development
AL001 treatment reduced elevated biomarkers in FTD-GRN patients, suggesting robust target engagement and potential disease modification.
Negative Factors
Catalyst Expectations
There is no meaningful catalyst expected until Q4 2025, at which time Alector may have less than one year of cash on the balance sheet.
Market Competition
Crowding and competition are expected to be an issue in Alector's efforts.
Stock Rating
The base-case valuation range for Alector is set at $1 to $2 with an Underweight rating, indicating limited upside potential.
Alector (ALEC) vs. S&P 500 (SPY)
Market Cap
$129.99M
Dividend YieldN/A
Average Volume (3M)810.14K
Price to Earnings (P/E)―
Beta (1Y)1.62
Revenue Growth3.60%
EPS Growth20.41%
CountryUS
Employees238
SectorHealthcare
Sector Strength56
IndustryBiotechnology
Share Statistics
EPS (TTM)-1.24
Shares Outstanding99,992,600
10 Day Avg. Volume1,152,756
30 Day Avg. Volume810,141
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.00
Price to Cash Flow (P/CF)0.00
P/FCF Ratio0.00
Enterprise Value/Market Cap-1.42
Enterprise Value/RevenueN/A
Enterprise Value/Gross Profit-1.84
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$4.50Price Target Upside246.15% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering6
Alector Business Overview & Revenue Model
Company DescriptionAlector, Inc., a clinical stage biopharmaceutical company, develops therapies for the treatment of neurodegeneration diseases. Its products include AL001, a humanized recombinant monoclonal antibody, which is in Phase III clinical trial for the treatment of frontotemporal dementia, Alzheimer's, Parkinson's, and amyotrophic lateral sclerosis diseases; and AL101 that is in Phase I clinical trial for the treatment of neurodegenerative diseases, including Alzheimer's and Parkinson's diseases. The company also offers AL002, a product candidate that is in Phase II clinical trial for the treatment of Alzheimer's disease; and AL003, which is in Phase I clinical trial for the treatment of Alzheimer's disease. In addition, its products in development stage include AL044 that targets MS4A4A, a risk gene for Alzheimer's disease. Alector, Inc. has a collaboration agreement with Adimab, LLC for the research and development of antibodies; and a strategic collaboration agreement with GlaxoSmithKline plc for the development and commercialization of monoclonal antibodies, such as AL001 and AL101 to treat neurodegenerative diseases. The company was founded in 2013 and is headquartered in South San Francisco, California.
How the Company Makes MoneyAlector 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.50
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
Neutral
1.30
Price Trends
1.29
Positive
1.56
Negative
3.26
Negative
Market Momentum
>-0.01
Negative
59.15
Neutral
90.23
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ALEC, the sentiment is Neutral. The current price of 1.3 is above the 20-day moving average (MA) of 1.07, above the 50-day MA of 1.29, and below the 200-day MA of 3.26, indicating a neutral trend. The MACD of >-0.01 indicates Negative momentum. The RSI at 59.15 is Neutral, neither overbought nor oversold. The STOCH value of 90.23 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for ALEC.
Alector Risk Analysis
Alector disclosed 78 risk factors in its most recent earnings report. Alector 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
Alector Peers Comparison
Overall Rating
UnderperformOutperform
Sector (52)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
57 Neutral | $127.49M | 6.31 | 0.51% | ― | 3.78% | ― | |
52 Neutral | $5.35B | 3.81 | -42.57% | 2.86% | 17.10% | 1.33% | |
47 Neutral | $129.99M | ― | -91.24% | ― | 3.60% | 20.41% | |
46 Neutral | $126.93M | ― | -69.10% | ― | -9.55% | 24.57% | |
41 Neutral | $123.55M | ― | -45.58% | ― | 71.44% | 43.22% | |
34 Underperform | $94.97M | ― | -37.51% | ― | ― | 52.54% |
* Healthcare Sector Average
Performance Comparison
ALEC
Alector
1.30
-4.02
-75.56%
CHRS
Coherus Biosciences
1.10
-1.12
-50.45%
ENTA
Enanta Pharmaceuticals
5.95
-8.65
-59.25%
XBIT
XBiotech
2.92
-6.46
-68.87%
CCCC
C4 Therapeutics
1.74
-4.97
-74.07%
TIL
Instil Bio
14.48
2.94
25.48%
Alector Earnings Call Summary
Earnings Call Date:May 01, 2025
(Q4-2024)
| % Change Since: 8.33%|
Next Earnings Date:Jul 31, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted significant progress in clinical trials, increased collaboration revenue for the quarter, and a strong cash position. However, minimal year-over-year revenue growth and sustained high R&D expenses present challenges.Q4-2024 Updates
Positive Updates
Increase in Collaboration Revenue
Collaboration revenue for the fourth quarter was $54.2 million compared to $15.2 million for the same period in 2023, indicating a significant increase.
Breakthrough Therapy Designation for Latozinemab
The FDA granted Latozinemab breakthrough therapy designation for FTD granulin based on INFRONT-2 Phase 2 clinical trial data.
Strong Cash Position
As of December 31st, 2024, cash, cash equivalents, and short-term investments totaled $413.4 million, indicating financial robustness to support strategic objectives.
Advanced Clinical Programs
Progress in late-stage clinical programs such as INFRONT-3 Phase 3 trial for frontotemporal dementia and PROGRESS-AD Phase 2 trial for Alzheimer's disease.
Negative Updates
Flat Year-over-Year Collaboration Revenue
Collaboration revenue for the year was $100.6 million compared to $97.1 million in 2023, showing minimal year-over-year growth.
High Research and Development Expenses
Total research and development expenses for the year were $185.9 million compared to $192.1 million in 2023, showing sustained high spending.
Uncertainty in Presymptomatic Patient Progression
Presymptomatic patients in the INFRONT-3 study may take between two to four years to progress to symptomatic, potentially complicating data analysis.
Company Guidance
During Alector's earnings call, the company provided guidance on several key metrics and upcoming milestones. They anticipate a significant portion of the company's potential to be realized in 2025, with expectations to complete patient recruitment for the PROGRESS-AD Phase 2 trial of AL101 in early Alzheimer's disease by mid-2025. Additionally, they plan to read out the pivotal Phase 3 trial in frontotemporal dementia with progranulin gene mutation by the fourth quarter of this year. Financially, Alector expects collaboration revenue for 2025 to range between $5 million and $15 million, with research and development expenses projected to be between $175 million and $185 million, and general and administrative expenses estimated to be between $55 million and $65 million. The company is optimistic about advancing its wholly-owned programs using the Alector Brain Carrier technology, with clinical trials expected in 2026, and they remain committed to creating sustainable value through data-driven decisions.Alector Corporate Events
Executive/Board Changes
Alector Announces Resignation of Chief Medical Officer
Neutral
Mar 28, 2025
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.
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.