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Alector Inc (ALEC)
NASDAQ:ALEC
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Alector
(NASDAQ:ALEC)
Rating:56Neutral
Price Target:
$2.50
▼(-11.97% Downside)
Positive Factors
Strong Cash Position
Alector's robust cash reserves ensure operational stability and support strategic initiatives, providing a financial buffer for ongoing R&D and clinical trials.
Proprietary Technology Platform
The proprietary platform underpins Alector's innovative approach to drug development, enhancing its competitive edge in the biotechnology sector.
Advancement of Clinical Trials
Progress in clinical trials, especially pivotal ones like INFRONT-3, positions Alector for potential breakthroughs in treating neurodegenerative diseases.
Negative Factors
Regulatory Challenges
Regulatory hurdles can delay trial progress and increase costs, impacting the timeline for bringing new therapies to market.
Complexity in Diagnosing FTD
Challenges in diagnosing FTD complicate patient enrollment and trial design, potentially hindering the development of effective treatments.
No Approved Treatments for FTD
The absence of approved treatments for FTD highlights the high-risk nature of Alector's focus area, requiring sustained R&D investment with uncertain outcomes.
Alector (ALEC) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$279.35M
Dividend YieldN/A
Average Volume (3M)1.44M
Price to Earnings (P/E)―
Beta (1Y)2.29
Revenue Growth46.78%
EPS Growth35.46%
CountryUS
Employees175
SectorHealthcare
Sector Strength53
IndustryBiotechnology
Share Statistics
EPS (TTM)-0.30
Shares Outstanding101,212,326
10 Day Avg. Volume1,059,925
30 Day Avg. Volume1,444,422
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)N/A
P/FCF RatioN/A
Enterprise Value/Market Cap-0.46
Enterprise Value/Revenue-1.57
Enterprise Value/Gross Profit-4.05
Enterprise Value/Ebitda0.99
Forecast
1Y Price Target
$4.13Price Target Upside45.42% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering6
Alector Business Overview & Revenue Model
Company DescriptionAlector (ALEC) is a biotechnology company focused on developing immuno-neurology therapeutics to treat neurodegenerative diseases such as Alzheimer's and other related conditions. By leveraging its proprietary platform, Alector aims to harness the immune system to target and modify the underlying biology of these diseases, with a commitment to addressing significant unmet medical needs. The company's pipeline includes several clinical-stage programs and collaborations aimed at advancing innovative treatments.
How the Company Makes MoneyAlector generates revenue primarily through the development and commercialization of its therapeutic products. This includes revenue from partnerships and collaborations with pharmaceutical companies, which may involve milestone payments and royalties on product sales. Additionally, the company may receive funding through grants, public and private investments, and potential licensing agreements. The successful advancement of its clinical programs into later stages, as well as the eventual market approval and sales of its therapies, are key contributors to its revenue streams.
Alector Earnings Call Summary
Earnings Call Date:Aug 07, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Nov 11, 2025
Earnings Call Sentiment Neutral
The earnings call presented several positive developments, including strong financial health, upcoming trial data, and completion of enrollment for a key program. However, significant challenges remain, such as regulatory hurdles and the complexity of diagnosing and treating FTD. The balance of promising advancements and existing challenges suggests a cautiously optimistic outlook.Q2-2025 Updates
Positive Updates
Upcoming INFRONT-3 Trial Data
Alector is anticipating top-line data from their Phase III INFRONT-3 trial of latozinemab by mid-Q4 2025. This trial is pivotal as it targets frontotemporal dementia due to the GRN gene mutation, a rare form of dementia with no approved therapy.
Strong Financial Position
The company closed the quarter with $307.3 million in cash, expected to provide runway into the second half of 2027. This financial strength supports their strategic objectives.
Completion of AL101 Phase II Enrollment
The enrollment for the Phase II trial of AL101 in early Alzheimer's disease was completed in April, with trial completion expected in 2026. AL101 aims to elevate progranulin levels, similar to latozinemab, for more prevalent neurodegenerative diseases.
Progranulin Elevation as a Key Endpoint
The FDA has recommended including plasma progranulin as a co-primary endpoint in the INFRONT-3 trial, highlighting its importance as a biologically meaningful marker in FTD-GRN.
Negative Updates
Regulatory Challenges
The FDA requested a change in the statistical analysis plan for the INFRONT-3 trial to include progranulin as a co-primary endpoint, which requires statistical significance on both co-primary endpoints for the study to be positive.
Complexity in Diagnosing Frontotemporal Dementia
FTD is frequently misdiagnosed or diagnosed late, with genetic testing not routinely performed. This complexity poses challenges in tailoring interventions and enrolling appropriate patients in clinical trials.
No Approved Treatments for FTD
Despite ongoing trials, there are currently no FDA-approved disease-modifying treatments for frontotemporal dementia, underscoring the urgent need for continued innovation.
Company Guidance
During the Alector Second Quarter and Midyear 2025 Earnings Conference Call, the company provided guidance on several key metrics. They reported a strong cash position of $307.3 million, which is expected to fund operations into the second half of 2027. For fiscal year 2025, Alector anticipates collaboration revenue to be between $13 million and $18 million, with total research and development expenses projected at $130 million to $140 million. General and administrative expenses are forecasted to range from $55 million to $65 million. The company is focused on advancing its late-stage clinical programs, particularly the Phase III INFRONT-3 trial for latozinemab, with pivotal data expected by mid-fourth quarter. They are also progressing the Phase II trial of AL101 for early Alzheimer's disease, with trial completion expected in 2026. Alector highlighted their proprietary technology platform, which supports their preclinical pipeline, including a brain-penetrant anti-amyloid beta antibody for Alzheimer's and an engineered GCase enzyme replacement therapy for Parkinson's disease.Alector Financial Statement Overview
Summary
Alector's financial statements depict a company facing substantial challenges in profitability, revenue growth, and cash flow management. The income statement shows consistent losses and declining revenue, while the balance sheet indicates a high debt-to-equity ratio and negative return on equity. The cash flow statement highlights ongoing cash burn and inefficiencies in cash management.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.45
Neutral
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
Neutral
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.40
Negative
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 81.13M | 100.56M | 97.06M | 133.62M | 207.09M | 21.10M |
| Gross Profit | 31.45M | 91.72M | 88.21M | 133.62M | 17.68M | -135.77M |
| EBITDA | -128.40M | -136.16M | -142.89M | -129.36M | -29.05M | -187.91M |
| Net Income | -115.29M | -119.05M | -130.39M | -133.31M | -36.33M | -190.23M |
Balance Sheet | ||||||
| Total Assets | 356.42M | 468.30M | 621.83M | 787.65M | 814.66M | 488.25M |
| Cash, Cash Equivalents and Short-Term Investments | 307.28M | 413.40M | 548.86M | 712.85M | 735.25M | 413.31M |
| Total Debt | 39.48M | 42.52M | 38.92M | 43.33M | 47.60M | 51.26M |
| Total Liabilities | 285.25M | 341.50M | 487.67M | 573.21M | 513.93M | 220.72M |
| Stockholders Equity | 71.17M | 126.80M | 134.16M | 214.44M | 300.72M | 267.53M |
Cash Flow | ||||||
| Free Cash Flow | -216.01M | -231.16M | -186.54M | -24.45M | 295.30M | -171.77M |
| Operating Cash Flow | -215.59M | -229.91M | -184.16M | -20.33M | 298.55M | -166.73M |
| Investing Cash Flow | 203.21M | 107.13M | 101.92M | -159.01M | -49.66M | -105.05M |
| Financing Cash Flow | 9.91M | 81.54M | 2.55M | 4.51M | 30.30M | 232.11M |
Alector Technical Analysis
Positive
2.84
Price Trends
1.98
Positive
1.64
Positive
1.70
Positive
Market Momentum
0.26
Negative
65.45
Neutral
64.94
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ALEC, the sentiment is Positive. The current price of 2.84 is above the 20-day moving average (MA) of 2.48, above the 50-day MA of 1.98, and above the 200-day MA of 1.70, indicating a bullish trend. The MACD of 0.26 indicates Negative momentum. The RSI at 65.45 is Neutral, neither overbought nor oversold. The STOCH value of 64.94 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ALEC.
Alector Risk Analysis
Alector disclosed 79 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 (51)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
56 Neutral | $279.35M | ― | -103.98% | ― | 46.78% | 35.46% | |
55 Neutral | $159.23M | 5.55 | -860.65% | ― | -53.67% | -330.15% | |
54 Neutral | $192.87M | ― | -52.99% | ― | 16.55% | 16.73% | |
51 Neutral | $7.90B | -0.36 | -43.38% | 2.23% | 22.34% | -2.15% | |
47 Neutral | $178.08M | ― | -80.64% | ― | -9.94% | 20.81% | |
| ― | $83.54M | ― | -15.23% | ― | ― | ― | |
34 Underperform | $155.13M | ― | -51.74% | ― | ― | 29.72% |
* Healthcare Sector Average
Performance Comparison
ALEC
Alector
2.84
-2.97
-51.12%
CHRS
Coherus Biosciences
1.31
-0.02
-1.50%
ENTA
Enanta Pharmaceuticals
8.33
-3.71
-30.81%
XBIT
XBiotech
2.80
-3.67
-56.72%
CCCC
C4 Therapeutics
2.64
-3.36
-56.00%
TIL
Instil Bio
22.98
-6.67
-22.50%
Alector Corporate Events
Executive/Board ChangesShareholder Meetings
Alector Announces CFO Resignation and Interim Appointment
Neutral
Jun 13, 2025
On June 9, 2025, Alector announced the resignation of its Chief Financial Officer, Dr. Marc Grasso, effective June 20, 2025, with Neil Berkley stepping in as Interim CFO. Berkley, who joined Alector in March 2024, brings extensive experience in corporate development and business strategy. Alector also held its annual meeting on June 11, 2025, where stockholders voted on director nominees, ratified Ernst & Young LLP as the accounting firm, and approved executive compensation. The company continues to progress its clinical trials and research programs, with significant developments expected in late 2025.
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.