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Zai Lab (ZLAB)
NASDAQ:ZLAB
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Zai Lab (ZLAB) AI Stock Analysis

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ZLAB

Zai Lab

(NASDAQ:ZLAB)

Rating:51Neutral
Price Target:
$35.00
▼(-0.11% Downside)
Zai Lab's overall score is primarily influenced by its financial performance challenges and valuation concerns. The positive outlook from the earnings call provides some optimism, but technical indicators suggest caution. The company's path to profitability and strategic initiatives are key factors for future growth.
Positive Factors
Clinical Trials
The Phase III FORTITUDE-101 study evaluating bemarituzumab in combination with chemotherapy in FGFR2b+ gastric cancer met its primary endpoint.
Product Development
ZLAB's wholly-owned asset ZL-1310 has demonstrated an impressive profile in 2L+ small cell lung cancer, marking an important step toward competing on the global stage.
Regulatory Approvals
The positive FORTITUDE-101 data support ZLAB’s plan to submit for regulatory approval in China as soon as possible.
Negative Factors
Competitive Pressure
The sales decrease of ZEJULA is mainly due to intense competition in the PARP inhibitor market.
Revenue Performance
2Q25 total revenues were below consensus estimate, but Vyvgart sales growth momentum returned.

Zai Lab (ZLAB) vs. SPDR S&P 500 ETF (SPY)

Zai Lab Business Overview & Revenue Model

Company DescriptionZai 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 MoneyZai 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 Earnings Call Summary

Earnings Call Date:Aug 07, 2025
(Q2-2025)
|
% Change Since: -9.50%|
Next Earnings Date:Nov 11, 2025
Earnings Call Sentiment Positive
The earnings call presents a generally positive outlook for Zai Lab, with strong revenue growth and a clear path towards profitability. VYVGART shows significant promise in the Chinese market, supported by updated guidelines. However, there are challenges such as competitive pressures on ZEJULA and supply issues affecting XACDURO. The company's diversified pipeline and strategic use of AI and local expertise provide a solid foundation for future growth.
Q2-2025 Updates
Positive Updates
Strong Revenue Growth
Total revenue grew 9% year-over-year to $110 million in the second quarter, driven by higher sales of VYVGART and other products.
Profitability on Horizon
Zai Lab is on track to achieve profitability in the fourth quarter of 2025 on an adjusted basis, with operating loss reduced by 37%.
VYVGART Momentum
Strong commercial execution for VYVGART in gMG with record levels of patient utilization and new patient starts, supported by updated national MG guidelines in China.
Pipeline Advancements
Progress in the pipeline with promising data for ZL-1310 in small cell lung cancer and multiple upcoming regulatory submissions.
Negative Updates
ZEJULA Performance
ZEJULA experienced a softer quarter due to evolving competitive dynamics within the PARP class, though signs of stabilization are emerging.
Supply Constraints
Supply constraints may limit near-term growth for XACDURO, a product with strong underlying demand.
Company Guidance
During the second quarter of 2025, Zai Lab reaffirmed its full-year revenue guidance of USD 560 million to USD 590 million and announced its trajectory towards achieving profitability in the fourth quarter. The company emphasized strong commercial execution, particularly with VYVGART, which showed record levels of patient utilization and increasing treatment duration, positioning it for significant long-term growth in China. Zai Lab's regional business is poised for substantial growth with the expected approvals of KarXT in schizophrenia and TIVDAK in cervical cancer. The company is also advancing its global R&D pipeline, with ZL-1310 (DLL3 ADC) demonstrating promising results in small cell lung cancer. Furthermore, Zai Lab is exploring label expansion opportunities for VYVGART across multiple immunology indications and expects it could exceed $1 billion in peak sales. Overall, Zai Lab continues to leverage its scalable commercial model and strategic investments to drive long-term growth and value.

Zai Lab Financial Statement Overview

Summary
Zai Lab shows robust revenue growth but struggles with profitability, as indicated by negative profit margins and return on equity. The balance sheet is stable with low leverage, but cash flow issues persist, highlighting the need for improved operational efficiency.
Income Statement
45
Neutral
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
55
Neutral
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
40
Negative
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.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue427.80M398.99M266.72M215.04M144.31M48.96M
Gross Profit267.14M251.13M170.90M141.02M92.07M32.22M
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 Assets1.16B1.19B1.04B1.22B1.61B1.30B
Cash, Cash Equivalents and Short-Term Investments732.16M779.67M806.45M1.01B1.41B1.19B
Total Debt191.40M153.47M15.15M20.39M15.54M18.60M
Total Liabilities372.37M344.86M240.18M174.54M230.00M128.29M
Stockholders Equity791.74M840.90M796.12M1.05B1.38B1.17B
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-10.78M420.02M249.96M-554.83M
Financing Cash Flow332.01M349.89M-6.43M-1.73M820.20M1.13B

Zai Lab Technical Analysis

Technical Analysis Sentiment
Positive
Last Price35.04
Price Trends
50DMA
36.30
Negative
100DMA
34.03
Positive
200DMA
31.81
Positive
Market Momentum
MACD
-0.49
Positive
RSI
47.54
Neutral
STOCH
25.05
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 35.04 is below the 20-day moving average (MA) of 36.33, below the 50-day MA of 36.30, and above the 200-day MA of 31.81, indicating a neutral trend. The MACD of -0.49 indicates Positive momentum. The RSI at 47.54 is Neutral, neither overbought nor oversold. The STOCH value of 25.05 is Neutral, 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 (51)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
75
Outperform
$4.36B30.6115.61%116.09%35.29%
73
Outperform
$4.18B19.3433.18%14.41%627.78%
64
Neutral
$3.95B-42.75%-60.63%-216.87%
62
Neutral
$5.04B-48.54%59.77%-92.92%
58
Neutral
$3.89B7.2533.08%96.00%
51
Neutral
$7.88B-0.12-39.86%2.18%21.38%-1.56%
51
Neutral
$3.79B-28.39%32.56%33.33%
* Healthcare Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
ZLAB
Zai Lab
35.04
16.01
84.13%
ACAD
ACADIA Pharmaceuticals
25.74
9.65
59.98%
PTCT
PTC Therapeutics
50.57
15.66
44.86%
MRUS
Merus
67.49
14.49
27.34%
KRYS
Krystal Biotech
150.48
-50.03
-24.95%
ACLX
Arcellx Inc
71.28
-0.62
-0.86%

Zai Lab Corporate Events

Executive/Board ChangesShareholder MeetingsStock Buyback
Zai Lab Shareholders Approve Key Proposals at AGM
Positive
Jun 18, 2025

On June 18, 2025, Zai Lab Limited held its 2025 Annual General Meeting of Shareholders, where holders of more than one-tenth of all voting share capital participated. The meeting resulted in the approval of Proposals 1 to 11 and 13 to 14, including the re-election of directors and the appointment of KPMG as auditors. The shareholders also approved an advisory vote on executive compensation and authorized the board to issue and repurchase shares up to 10% of the total issued shares, reflecting strong shareholder support for the company’s governance and strategic initiatives.

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.Date of analysis: Aug 23, 2025