Zai Lab (ZLAB) AI Stock Analysis

• Market Cap: $3.73B
• Dividend Yield: N/A
• Average Volume (3M): 749.31K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.82
• Revenue Growth: 32.56%
• EPS Growth: 33.33%
• Country: US
• Employees: 1,869
• Sector: Healthcare
• Sector Strength: 47
• Industry: Biotechnology
• EPS (TTM): -0.37
• Shares Outstanding: 111,762,800
• 10 Day Avg. Volume: 1,147,987
• 30 Day Avg. Volume: 749,311
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 0.85
• Enterprise Value/Revenue: 7.43
• Enterprise Value/Gross Profit: 11.89
• Enterprise Value/Ebitda: -14.98
• 1Y Price Target: $53.74
• Price Target Upside: 63.84% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 8

• Rating: 52 Neutral
• Price Target: $33.00 ▲(0.61% Upside)

Zai Lab's overall score is driven by strong earnings call insights, indicating potential future growth and profitability. However, financial performance and valuation scores are weighed down by ongoing losses and cash flow issues, while technical indicators suggest neutral momentum.

Positive Factors

Revenue Growth

Consistent revenue growth indicates strong market demand and effective commercialization strategies, supporting long-term business expansion.

Pipeline Advancements

Advancements in the pipeline, such as ZL-1310, enhance Zai Lab's competitive position and potential for future revenue streams.

Profitability Prospects

Achieving profitability will improve financial stability and investor confidence, enabling reinvestment into growth initiatives.

Negative Factors

Profitability Challenges

Ongoing profitability challenges may hinder financial flexibility and necessitate strategic adjustments to improve margins.

Cash Flow Issues

Cash flow issues can limit operational capabilities and investment in growth, posing risks to long-term sustainability.

Supply Constraints

Supply constraints could impact revenue growth and market share, necessitating strategic management to mitigate disruptions.

Zai Lab Business Overview & Revenue Model

Company Description

Zai Lab Limited develops and commercializes therapies to treat oncology, autoimmune disorders, infectious diseases, and neuroscience primarily in Mainland China and Hong Kong. The company's commercial products include Zejula, a once-daily small-molecule poly polymerase 1/2 inhibitor; Optune, a device that delivers tumor treating fields; NUZYRA for acute bacterial skin and skin structure infections, and community acquired bacterial pneumonia; and Qinlock to treat gastrointestinal stromal tumors. It also develops Odronextamab to treat follicular lymphoma, diffuse large B-cell lymphoma, and other B-celllymphomas; Repotrectinib, a tyrosine kinase inhibitor (TKI) to target ROS1 and TRK A/B/C in TKI-naïve- or -pretreated cancer patients; Margetuximab for the treatment of breast and gastroesophageal cancers; Adagrasib for treating KRAS-G12C-mutated NSCLC, colorectal cancer, pancreatic cancer, and other solid tumors; and Bemarituzumab to treat gastric and gastroesophageal junction cancer. In addition, the company develops CLN-081 for the treatment of patients with EGFR exon 20 insertion NSCLC; Elzovantinib, an orally bioavailable multi-targeted kinase inhibitor; Tebotelimab, a tetravalent IgG4 monoclonal antibody; Retifanlimab that inhibits interactions between PD-1 and its ligands; ZL-2309, an orally active, selective, and ATP-competitive cell division cycle 7 (CDC7) kinase inhibitor; ZL-1201, a humanized IgG4 monoclonal antibody; Efgartigimod to reduce disease-causing immunoglobulin G antibodies; ZL-1102, a human nanobody targeting interleukin- 17A; KarXT for the treatment of psychiatric and neurological conditions; ZL-2313, an investigational inhibitor of triple-mutant EGFR harboring; ZL-2314, an investigational inhibitor of double-mutant EGFR harboring; and Sulbactam/durlobactam for the treatment of serious infections caused by Acinetobacter. Zai Lab Limited was incorporated in 2013 and is headquartered in Shanghai, China.

How the Company Makes Money

Zai Lab generates revenue through multiple streams primarily focused on the development and commercialization of its therapeutic products. The company earns money from product sales of its approved therapies, as well as milestone payments from partnerships with larger pharmaceutical companies. These partnerships often involve collaboration agreements where Zai Lab retains certain rights to develop and market drugs in specific territories, further enhancing its revenue potential. Additionally, Zai Lab may receive royalties on sales from partnered products, which contribute to its overall earnings. The company's strategic focus on innovative therapies, coupled with a strong pipeline of drug candidates, positions it to capitalize on growing market opportunities within the biopharmaceutical industry.

Zai Lab Financial Statement Overview

Summary

Zai Lab shows strong revenue growth but faces significant profitability challenges with negative profit margins and return on equity. The balance sheet is stable with low leverage, but cash flow issues highlight the need for improved operational efficiency.

Income Statement

Zai Lab's revenue has shown consistent growth, with a TTM increase of 2.27%. However, the company is still operating at a loss, with negative net profit and EBIT margins. The gross profit margin is relatively healthy at 63.45%, indicating good control over production costs. The negative net profit margin of -60.26% highlights significant challenges in achieving profitability.

Balance Sheet

The company maintains a low debt-to-equity ratio of 0.24, suggesting conservative leverage. However, the return on equity is negative at -33.35%, reflecting ongoing losses. The equity ratio is strong, indicating a solid capital structure with stockholders' equity making up a significant portion of total assets.

Cash Flow

Zai Lab's cash flow situation is concerning, with negative operating and free cash flows. The free cash flow growth rate is negative, and the operating cash flow to net income ratio is below 1, indicating inefficiencies in converting income to cash. The free cash flow to net income ratio is above 1, suggesting some ability to cover net losses with free cash flow.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	427.80M	398.99M	266.72M	215.04M	144.31M	48.96M
Gross Profit	267.14M	251.13M	170.90M	141.02M	92.07M	32.22M
EBITDA	-212.18M	-234.57M	-365.11M	-384.66M	-689.46M	-262.96M
Net Income	-212.52M	-257.10M	-334.62M	-443.29M	-704.47M	-268.90M
Balance Sheet
Total Assets	1.16B	1.19B	1.04B	1.22B	1.61B	1.30B
Cash, Cash Equivalents and Short-Term Investments	732.16M	779.67M	806.45M	1.01B	1.41B	1.19B
Total Debt	191.40M	153.47M	15.15M	20.39M	15.54M	18.60M
Total Liabilities	372.37M	344.86M	240.18M	174.54M	230.00M	128.29M
Stockholders Equity	791.74M	840.90M	796.12M	1.05B	1.38B	1.17B
Cash Flow
Free Cash Flow	-227.37M	-276.39M	-206.67M	-392.63M	-568.18M	-226.72M
Operating Cash Flow	-175.31M	-214.87M	-198.18M	-367.64M	-549.23M	-216.06M
Investing Cash Flow	-54.43M	-375.19M	-10.78M	420.02M	249.96M	-554.83M
Financing Cash Flow	332.01M	349.89M	-6.43M	-1.73M	820.20M	1.13B

Zai Lab Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 32.80
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

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 32.8 is below the 20-day moving average (MA) of 32.87, below the 50-day MA of 34.85, and above the 200-day MA of 32.04, indicating a neutral trend. The MACD of -1.15 indicates Negative momentum. The RSI at 48.82 is Neutral, neither overbought nor oversold. The STOCH value of 62.45 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ZLAB.

Zai Lab Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
KRYS	76 Outperform	$4.18B	29.23	15.61%	―	116.09%	35.29%
ACAD	73 Outperform	$3.98B	17.74	33.18%	―	14.41%	627.78%
MRUS	62 Neutral	$5.28B	―	-48.54%	―	59.77%	-92.92%
PTCT	58 Neutral	$4.85B	8.76	33.08%	―	96.00%	―
ZLAB	52 Neutral	$3.73B	―	-28.39%	―	32.56%	33.33%
Sector *	51 Neutral	$7.92B	-0.36	-43.38%	2.24%	22.38%	-2.16%
ACLX	51 Neutral	$4.23B	―	-42.75%	―	-60.63%	-216.87%