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Zai Lab (ZLAB)
NASDAQ:ZLAB
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Zai Lab
(NASDAQ:ZLAB)
Rating:59Neutral
Price Target:
$43.00
▲(4.88%Upside)
Positive Factors
Clinical Trial Success
Zai Lab announced positive results from phase 1a/1b data on ZL-1310 for patients with ES-SCLC, showing a high response rate and a well-tolerated safety profile.
Regulatory Milestone
The US FDA granted Fast Track designation to ZL-1310, which is a significant milestone for the company.
Negative Factors
Competitive Market
The presence of more competitors in Zai Lab's core product market offsets the potential benefits of its products nearing commercialization.
Safety Concerns
There has been an increase in Grade 3+ cytopenias (7-21%), new instances of Grade 3+ interstitial lung disease (ILD, 7%), and a rise in treatment discontinuations (18%).
Zai Lab (ZLAB) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$4.85B
Dividend YieldN/A
Average Volume (3M)1.01M
Price to Earnings (P/E)―
Beta (1Y)0.99
Revenue Growth43.72%
EPS Growth28.63%
CountryUS
Employees1,869
SectorHealthcare
Sector Strength58
IndustryBiotechnology
Share Statistics
EPS (TTM)-0.04
Shares Outstanding110,328,380
10 Day Avg. Volume1,184,110
30 Day Avg. Volume1,005,310
Financial Highlights & Ratios
PEG Ratio0.31
Price to Book (P/B)3.32
Price to Sales (P/S)0.00
P/FCF Ratio-12.78
Enterprise Value/Market Cap5.29
Enterprise Value/Revenue17.13
Enterprise Value/Gross Profit96.51
Enterprise Value/Ebitda-23.30
Forecast
1Y Price Target
$53.04Price Target Upside29.37% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering7
Zai Lab Business Overview & Revenue Model
Company DescriptionZai Lab (ZLAB) is a biopharmaceutical company focused on the discovery, development, and commercialization of innovative medicines. The company primarily operates in the sectors of oncology, autoimmune disorders, and infectious diseases. Zai Lab builds a portfolio of proprietary and in-licensed drug candidates, aiming to address major unmet medical needs by introducing cutting-edge therapies to patients in China and globally.
How the Company Makes MoneyZai Lab makes money through the commercialization of its pharmaceutical products and drug candidates. The company generates revenue by obtaining regulatory approvals and subsequently marketing these drugs to healthcare providers, hospitals, and patients. Key revenue streams include sales of approved therapies in China and collaborations or licensing agreements with other pharmaceutical companies for the development and commercialization of drug candidates. Significant partnerships with global biopharmaceutical firms also contribute to its earnings by providing milestone and royalty payments.
Zai Lab Earnings Call Summary
Earnings Call Date:May 08, 2025
(Q1-2025)
| % Change Since: 44.57%|
Next Earnings Date:Aug 11, 2025
Earnings Call Sentiment Positive
The earnings call reflected a generally positive outlook with strong revenue growth and promising pipeline developments. While there were some temporary challenges such as seasonal declines and inventory dynamics affecting VYVGART sales, the company remains optimistic about achieving its full-year targets.Q1-2025 Updates
Positive Updates
Strong Revenue Growth
Total revenue grew 22% year-over-year to $106.5 million in the first quarter, driven by increased sales for VYVGART, ZEJULA, and NUZYRA.
Improved Operating Loss
Operating loss improved by 20% to $56.3 million and by 25% to $37.1 million on an adjusted basis.
Promising Pipeline Developments
ZL-1310 is on track for a potential FDA approval in 2027. ZL-6201 and ZL-1503 are expected to enter clinical trials this year.
Positive VYVGART Outlook
VYVGART sales are expected to outpace total revenue growth, driven by increased patient demand and expanded access.
Strong Financial Position
The company ended the quarter with a cash position of $857.3 million.
Negative Updates
Seasonal Decline in VYVGART Sales
First quarter sales reflected seasonal trends with a temporary decline in patients in January and February due to Chinese New Year.
Inventory Dynamics Affecting Sales
Inventory build in Q4 for VYVGART Hytrulo had a notable impact on reported sales growth.
Company Guidance
During Zai Lab's first quarter 2025 earnings call, the company reaffirmed its full-year revenue guidance of $560 million to $590 million, anticipating accelerating sales growth that would help achieve profitability by Q4 2025. The company highlighted its differentiated portfolio and strong business fundamentals, targeting $2 billion in revenue by 2028. Zai Lab's lead global asset, ZL-1310, is progressing with updated Phase I data expected at ASCO in June, aiming for potential FDA approval in 2027. The company reported a total revenue increase of 22% year-over-year to $106.5 million, with operating loss improved by 20% to $56.3 million. The adjusted operating loss, excluding non-cash items, improved by 25% to $37.1 million. Zai Lab ended the quarter with a cash position of $857.3 million and reiterated its focus on achieving quarter-over-quarter growth through the remainder of the year.Zai Lab Financial Statement Overview
Summary
Zai Lab shows strong revenue growth and a robust balance sheet with low leverage, but faces significant profitability and liquidity challenges. The company remains unprofitable with negative net margins, and negative free cash flow poses liquidity risks.Income Statement
Zai Lab's revenue has shown consistent growth over the years, with a revenue growth rate of 7.8% from 2024 to TTM (Trailing-Twelve-Months). However, the company remains unprofitable, with negative net and EBIT margins, indicating ongoing operational challenges. The gross profit margin is relatively high at 63.4% for TTM, suggesting efficient production processes but overshadowed by larger operational losses.45
Neutral
Balance Sheet
The company maintains a strong equity position with a high equity ratio of 69.1% in TTM, reflecting financial stability. The debt-to-equity ratio remains low at 0.24, indicating conservative leverage. However, declining stockholder equity and consistent net losses pose potential risks to long-term financial health.60
Neutral
Cash Flow
Zai Lab's cash flow position is concerning, with negative free cash flow and operating cash flow. The operating cash flow to net income ratio is positive, showing some alignment between cash flow and accounting profits, but the free cash flow to net income ratio is negative, highlighting liquidity challenges.35
Negative
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 418.33M | 398.99M | 266.72M | 215.04M | 144.31M | 48.96M | Gross Profit |
| 265.44M | 251.13M | 170.90M | 141.02M | 92.07M | 32.22M | EBIT |
| -268.12M | -282.12M | -366.57M | -404.36M | -700.06M | -301.80M | EBITDA |
| -246.64M | -234.57M | -365.11M | -384.66M | -689.46M | -262.96M | Net Income Common Stockholders |
| -252.07M | -257.10M | -334.62M | -481.99M | -692.44M | -298.16M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 275.93M | 779.67M | 806.45M | 1.01B | 1.41B | 1.19B | Total Assets |
| 355.15M | 1.19B | 1.04B | 1.22B | 1.61B | 1.30B | Total Debt |
| 21.78M | 153.47M | 15.15M | 20.39M | 15.54M | 18.60M | Net Debt |
| -54.15M | -296.20M | -775.00M | -988.08M | -948.56M | -423.52M | Total Liabilities |
| 60.49M | 344.86M | 240.18M | 174.54M | 230.00M | 128.29M | Stockholders Equity |
| 294.66M | 840.90M | 796.12M | 1.05B | 1.38B | 1.17B |
| Cash Flow | Free Cash Flow | ||||
| -238.84M | -276.39M | -206.67M | -392.63M | -568.18M | -226.72M | Operating Cash Flow |
| -186.46M | -214.87M | -198.18M | -367.64M | -549.23M | -216.06M | Investing Cash Flow |
| -52.35M | -375.19M | -10.78M | 420.02M | 249.96M | -554.83M | Financing Cash Flow |
| 345.48M | 349.89M | -6.43M | -1.73M | 820.20M | 1.13B |
Zai Lab Technical Analysis
Positive
41.00
Price Trends
31.98
Positive
32.16
Positive
28.96
Positive
Market Momentum
2.69
Negative
69.02
Neutral
88.88
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ZLAB, the sentiment is Positive. The current price of 41 is above the 20-day moving average (MA) of 34.60, above the 50-day MA of 31.98, and above the 200-day MA of 28.96, indicating a bullish trend. The MACD of 2.69 indicates Negative momentum. The RSI at 69.02 is Neutral, neither overbought nor oversold. The STOCH value of 88.88 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ZLAB.
Zai Lab Risk Analysis
Zai Lab disclosed 100 risk factors in its most recent earnings report. Zai Lab 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
Zai Lab Peers Comparison
Overall Rating
UnderperformOutperform
Sector (54)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $7.04B | 18.43 | 6.01% | ― | 1.42% | ― | |
75 Outperform | $5.22B | 25.24 | 15.38% | ― | 16.98% | -17.76% | |
70 Outperform | $4.04B | 7.87 | 33.08% | ― | 91.12% | ― | |
61 Neutral | $3.34B | 131.99 | 5.88% | ― | 2.78% | -54.72% | |
59 Neutral | $4.85B | ― | -32.05% | ― | 43.72% | 28.63% | |
54 Neutral | $3.87B | ― | -34.19% | ― | -17.87% | -1.89% | |
54 Neutral | $5.41B | 3.27 | -45.10% | 3.29% | 16.81% | 0.02% |
* Healthcare Sector Average
Performance Comparison
ZLAB
Zai Lab
41.00
22.02
116.02%
OPCH
Option Care Health
31.60
3.10
10.88%
PTCT
PTC Therapeutics
51.26
15.86
44.80%
ELAN
Elanco Animal Health
13.81
-4.42
-24.25%
RNA
Avidity Biosciences
31.37
-8.23
-20.78%
SHC
Sotera Health
11.43
0.07
0.62%
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.