Alvotech (ALVO) AI Stock Analysis

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Alvotech

(NASDAQ:ALVO)

28Underperform

Alvotech's stock score is hampered by significant financial weaknesses, including negative equity and cash flow issues. While the earnings call provided some optimism with strong revenue and margin growth, technical analysis points to bearish trends, and valuation metrics remain unattractive. Despite potential growth opportunities, high financial risk and current market sentiment weigh heavily on the stock's overall score.

Alvotech (ALVO) vs. S&P 500 (SPY)

Market Cap

$2.51B

Dividend YieldN/A

Average Volume (3M)135.78K

Price to Earnings (P/E)―

Beta (1Y)0.76

Revenue Growth408.85%

EPS Growth59.22%

CountryUS

Employees1,012

SectorHealthcare

Sector Strength64

IndustryDrug Manufacturers - Specialty & Generic

Share Statistics

EPS (TTM)-0.85

Shares Outstanding301,805,660

10 Day Avg. Volume156,173

30 Day Avg. Volume135,778

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)65.43

Price to Cash Flow (P/CF)N/A

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

$20.00

Price Target Upside139.23% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering3

Alvotech Business Overview & Revenue Model

Company DescriptionAlvotech, through its subsidiaries, develops and manufactures biosimilar medicines for patients worldwide. It offers biosimilar products in the therapeutic areas of autoimmune, eye, and bone disorders, as well as cancer. The company's lead program is AVT02, a high concentration formulation biosimilar to Humira to treat various inflammatory conditions, including rheumatoid arthritis, psoriatic arthritis, Crohn's disease, ulcerative colitis, plaque psoriasis, and other indications; AVT04, a biosimilar to Stelara to treat various inflammatory conditions comprising psoriatic arthritis, Crohn's disease, ulcerative colitis, plaque psoriasis, and other indications; AVT06, a biosimilar to Eylea to treat various conditions, such as age-related macular degeneration, macular edema, and diabetic retinopathy; and AVT03, a biosimilar to Xgeva and Prolia, which is in the pre-clinical phase to treat prevent bone fracture, spinal cord compression, and the need for radiation or bone surgery in patients with certain types of cancer, as well as prevent bone loss and increase bone mass. It also offers AVT05, a biosimilar to Simponi and Simponi Aria, which is in early phase development to treat various inflammatory conditions, including rheumatoid arthritis, psoriatic arthritis, ulcerative colitis, and other indications; AVT16, a biosimilar to an immunology product; AVT23, a biosimilar to Xolair, which is in late-stage development to treat nasal polyps; and AVT33, a biosimilar to an oncology product. The company was founded in 2013 and is headquartered in Reykjavik, Iceland.

How the Company Makes MoneyAlvotech generates revenue primarily through the development, manufacturing, and commercialization of biosimilar drugs. These biosimilars are sold to healthcare providers, distributors, and pharmaceutical companies, either directly or through strategic partnerships. The company has established collaborations with various global and regional partners to enhance distribution, regulatory approval, and market access, which are crucial factors in driving its earnings. Alvotech’s revenue model relies on entering markets with expiring biologic patents, offering competitive pricing strategies to gain market share, and expanding its pipeline of biosimilar products to sustain growth.

Alvotech Financial Statement Overview

Summary

Alvotech faces significant financial challenges with persistent losses, high leverage, and negative equity, typical of a pharmaceutical company in heavy development and scaling phases. Despite strong revenue growth, profitability remains elusive, and the company must address its cash flow and debt situation to ensure financial stability and growth sustainability.

Income Statement

Negative

Alvotech's income statement shows significant challenges with negative net income and EBIT margins in TTM (Trailing-Twelve-Months), indicating ongoing profitability issues. Despite a strong revenue growth rate of 302% from the previous year, the company struggles with high operating losses, as evidenced by negative EBIT and EBITDA margins. This suggests that while the company is growing revenue, it is not translating this growth into profitability.

Balance Sheet

Negative

The balance sheet reflects a concerning financial position with a negative stockholders' equity and a high debt-to-equity ratio, indicating heavy reliance on debt financing. The equity ratio is also negative, underscoring a lack of equity buffer. The return on equity is negative, reflecting ongoing losses and financial instability.

Cash Flow

Negative

The cash flow statement indicates negative free cash flow, although there is a slight improvement in free cash flow growth rate. Operating cash flow remains negative, highlighting challenges in generating cash from operations. The company's reliance on financing activities persists, which may be unsustainable long-term.

TTM	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
367.46M	91.43M	83.03M	36.77M	66.62M
	Gross Profit
206.06M	-69.42M	18.93M	36.77M	66.62M
	EBIT
-45.44M	-354.86M	-346.44M	-235.46M	-137.54M
	EBITDA
-51.87M	-484.86M	-439.80M	3.99M	-125.67M
	Net Income Common Stockholders
-441.45M	-551.73M	-513.58M	-101.50M	-170.04M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
7.92M	11.16M	66.43M	17.56M	31.69M
	Total Assets
118.61M	950.09M	828.44M	597.98M	474.42M
	Total Debt
141.97M	1.08B	805.10M	523.05M	676.85M
	Net Debt
134.05M	1.06B	738.67M	505.50M	645.16M
	Total Liabilities
335.42M	1.88B	1.39B	733.59M	1.34B
	Stockholders Equity
-216.81M	-932.49M	-564.42M	-135.61M	-867.24M
Cash Flow		Free Cash Flow
-301.21M	-358.66M	-361.39M	-268.80M	-86.28M
	Operating Cash Flow
-264.80M	-312.19M	-312.39M	-228.17M	-74.30M
	Investing Cash Flow
1.72M	-46.34M	-63.54M	-40.63M	-16.90M
	Financing Cash Flow
313.67M	301.32M	424.91M	254.83M	55.40M

Alvotech Technical Analysis

Technical Analysis Sentiment

Negative

Last Price8.36

Price Trends

50DMA

10.64

Negative

100DMA

11.56

Negative

200DMA

11.75

Negative

Market Momentum

MACD

-0.73

Negative

RSI

34.16

Neutral

STOCH

59.92

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ALVO, the sentiment is Negative. The current price of 8.36 is below the 20-day moving average (MA) of 9.10, below the 50-day MA of 10.64, and below the 200-day MA of 11.75, indicating a bearish trend. The MACD of -0.73 indicates Negative momentum. The RSI at 34.16 is Neutral, neither overbought nor oversold. The STOCH value of 59.92 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ALVO.

Alvotech Risk Analysis

Alvotech disclosed 95 risk factors in its most recent earnings report. Alvotech 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

Alvotech Peers Comparison

Overall Rating

UnderperformOutperform

Sector (51)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SUPN	65 Neutral	$1.69B	22.98	7.55%	―	8.94%	5171.26%
HCM	58 Neutral	$2.48B	64.28	5.06%	―	-25.48%	-63.36%
DVAX	57 Neutral	$1.30B	59.76	4.48%	―	19.36%	―
PRGO	53 Neutral	$3.32B	―	-3.53%	4.42%	-6.05%	-1677.05%
AMRX	51 Neutral	$2.23B	―	106.97%	―	16.73%	-22.44%
Sector *	51 Neutral	$5.20B	3.18	-40.80%	2.96%	17.66%	1.94%
ALVO	28 Underperform	$2.51B	―	128.44%	―	408.85%	59.22%

* Healthcare Sector Average

Performance Comparison

ALVO

Alvotech

8.36

-5.04

-37.61%

DVAX

Dynavax

10.72

-1.04

-8.84%

PRGO

Perrigo Company

24.81

-4.50

-15.35%

SUPN

Supernus Pharmaceuticals

30.84

0.89

2.97%

HCM

HUTCHMED

15.60

-2.65

-14.52%

AMRX

Amneal Pharmaceuticals

7.25

1.85

34.26%

Alvotech Earnings Call Summary

Earnings Call Date: Mar 26, 2025 | % Change Since: -27.62% | Next Earnings Date: May 7, 2025

Earnings Call Sentiment Positive

Alvotech reported significant revenue and margin growth, driven by strong product sales and pipeline advancements. While there were minor FDA inspection observations, these are considered easily manageable. The company faces some uncertainty in revenue timing but remains on track for substantial growth.

Highlights

Significant Revenue Growth

Total revenues for the first 9 months of 2024 increased nearly 9x compared to the same period in 2023, reaching $339 million.

Record Product Revenues

Product revenues for the first 9 months were $128 million, a 330% increase from the prior year, with the highest recorded quarter at $62 million.

Increased Product Margins

Product margins improved significantly, reaching 37% in Q3 2024 compared to 17% in Q2.

Strong Pipeline and Approvals

EMA acceptance for AVT03 and AVT05, and U.S. approval for an additional presentation of SELARSDI, a biosimilar to Stelara. AVT16 is now in patient trials.

Strategic Partnerships and Global Expansion

Ex-U.S. launches of AVT02 and AVT04 in multiple markets, with strong demand in the European Union. 1/3 of product revenues expected from outside the U.S. in 2024.

Lowlights

FDA Inspection Observations

The U.S. FDA issued two observations during a GMP inspection of the Reykjavik manufacturing site, though they are deemed easily addressable.

Potential Revenue Timing Uncertainty

Product shipments, particularly for Humira, could spill over into Q1 2025, creating uncertainty in revenue timing.

Company Guidance

During Alvotech's Q3 2024 earnings call, guidance was highlighted with several key metrics demonstrating the company's robust performance and future expectations. Total revenues for the first nine months of 2024 reached $339 million, representing an almost ninefold increase compared to the same period in 2023, with product revenues climbing to $128 million. The company also reported milestone revenues exceeding $210 million year-to-date. The product gross margin showed significant improvement, more than doubling in the third quarter compared to the second quarter, reaching 37%. The company remains optimistic about continued margin expansion due to enhanced utilization of its manufacturing site and shifts in product mix, including the upcoming introduction of the Stelara biosimilar in the U.S. in 2025. Alvotech also reiterated its 2024 revenue guidance of $400 million to $500 million, emphasizing strong product and milestone revenue growth, with expectations of ramped-up shipments in the fourth quarter. Moreover, the company plans to leverage its extensive pipeline, including biosimilar candidates to Eylea and Simponi, to drive future growth, projecting up to one-third of product revenues from markets outside the U.S. by year-end.

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.