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Zai Lab Ltd (ZLAB)
NASDAQ:ZLAB
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Zai Lab
(NASDAQ:ZLAB)
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Rating:48Neutral
Price Target:
$16.50
▼(-2.94% Downside)
Zai Lab's overall stock score is primarily impacted by its financial performance challenges, including ongoing losses and cash flow issues. Technical indicators suggest bearish momentum, while valuation concerns persist due to negative earnings. The earnings call provided some positive insights into future growth potential, but current market conditions and financial metrics weigh heavily on the score.
Positive Factors
Pipeline Development
Strong pipeline development with new trials and plans for global approvals enhances long-term growth prospects and competitive positioning.
Regulatory Approvals
Renewal in China's NRDL ensures continued market access and revenue streams, supporting long-term financial stability and market presence.
Financial Flexibility
The new debt facility provides additional capital resources, supporting operational needs and strategic initiatives in a competitive market.
Negative Factors
Profitability Challenges
Persistent profitability issues indicate operational inefficiencies, which could hinder long-term financial health and shareholder returns.
Cash Flow Issues
Negative cash flow impacts the ability to fund operations and growth, posing a risk to sustainability without improved cash management.
Commercial Growth Challenges
Slower growth in a key market like China could limit revenue expansion, affecting long-term strategic goals and market competitiveness.
Zai Lab (ZLAB) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.90B
Dividend YieldN/A
Average Volume (3M)691.33K
Price to Earnings (P/E)―
Beta (1Y)0.90
Revenue Growth23.73%
EPS Growth30.16%
CountryUS
Employees1,869
SectorHealthcare
Sector Strength45
IndustryBiotechnology
Share Statistics
EPS (TTM)-0.33
Shares Outstanding112,812,805
10 Day Avg. Volume773,931
30 Day Avg. Volume691,328
Financial Highlights & Ratios
PEG Ratio0.11
Price to Book (P/B)3.08
Price to Sales (P/S)6.50
P/FCF Ratio-9.38
Enterprise Value/Market Cap0.76
Enterprise Value/Revenue3.25
Enterprise Value/Gross Profit5.30
Enterprise Value/Ebitda-7.73
Forecast
1Y Price Target
$38.92Price Target Upside128.94% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering4
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
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 primarily through the sale of its proprietary drugs and therapies once they receive regulatory approval. The company engages in commercializing its products in China and collaborates with global pharmaceutical firms to co-develop and market treatments, thus sharing revenue streams. Key revenue sources include product sales from its marketed drugs, milestone payments from partners upon achieving specific development or regulatory goals, and royalties from licensed products. Significant partnerships with established pharmaceutical companies enhance Zai Lab's pipeline and provide additional financial resources, contributing to its overall earnings.
Zai Lab Earnings Call Summary
Earnings Call Date:Nov 06, 2025
(Q3-2025)
| % Change Since: |
Next Earnings Date:Mar 03, 2026
Earnings Call Sentiment Neutral
The earnings call presented a mixed outlook. Zai Lab showcased strong pipeline developments and success with VYVGART's market penetration in China. However, challenges such as slower commercial growth, supply constraints, and setbacks in the Bema program created significant headwinds. The company's focus on long-term growth and profitability remains strong.Q3-2025 Updates
Positive Updates
Strong Efficacy Observed in Zoci Trials
Zoci (ZL-1310) showed an overall response rate of 68% and a disease control rate of 94% in Phase I trials for small cell lung cancer, with promising results in patients with brain metastases.
Significant Pipeline Development
Zai Lab has advanced several key programs, including Zoci entering a pivotal stage, and new trials for ZL-1503 and ZL-6201. Plans for global approvals and a robust pipeline were highlighted.
VYVGART Launch Success
VYVGART has become the #1 innovative drug by sales among all new launches in China over the past 2 years, with nearly 21,000 patients treated and penetration in gMG at 12%.
Financial Discipline and Growth
Despite slower-than-expected growth, Zai Lab's China business is commercially profitable, and the company reported a 14% year-over-year revenue growth, with a focus on financial discipline and efficiency.
Negative Updates
Slower Commercial Growth in China
The commercial growth in China has been slower than expected due to complex market dynamics, affecting products like VYVGART and ZEJULA.
Challenges with Bema Development
The Bema program faces significant challenges following negative results from the 098 study, making approval in China unlikely.
Revised Revenue Guidance
The company revised its full-year revenue guidance downward to at least $460 million, reflecting slower-than-anticipated market build.
XACDURO Supply Constraints
Demand for XACDURO remains robust, but supply constraints have affected the ability to meet market demand fully.
Company Guidance
During the Zai Lab Third Quarter 2025 Financial Results Conference Call, key guidance was provided about the company's performance and future outlook. Total revenue for the quarter was reported at $116.1 million, driven by a 14% year-over-year growth, with VYVGART contributing $27.7 million despite a $2.4 million reduction due to a voluntary price adjustment. The company updated its full-year total revenue guidance to at least $460 million. Zai Lab highlighted the progress of Zoci (ZL-1310), which showed a 68% overall response rate and a 94% disease control rate in Phase I trials, with a median duration of response at 6.1 months. The call noted an improvement in adjusted loss from operations, which was $28 million, a 42% improvement from the previous year. The company remains commercially profitable in China and is on a path to overall profitability, with $817 million in cash providing the flexibility to invest in innovation and execution. Zai Lab emphasized its global pipeline progress with plans for several key data readouts and trial initiations in the next 12 months, including studies on ZL-1503, ZL-6201, and ZL-1222.Zai Lab Financial Statement Overview
Summary
Zai Lab shows modest revenue growth but faces significant profitability and cash flow challenges. The low leverage provides some financial stability, but the company must improve operational efficiency and cash flow management to enhance financial health.Income Statement
Zai Lab's income statement shows a modest revenue growth rate of 3.23% TTM, indicating some positive momentum. However, the company continues to operate at a loss, with a negative net profit margin of -49.68% and EBIT margin of -48.72% TTM. These figures highlight ongoing profitability challenges, despite a healthy gross profit margin of 62.39% TTM. The company needs to focus on improving operational efficiency to move towards profitability.45
Neutral
Balance Sheet
The balance sheet reflects a relatively low debt-to-equity ratio of 0.24 TTM, suggesting conservative leverage. However, the return on equity is negative at -27.32% TTM, indicating that the company is not generating positive returns for shareholders. The equity ratio is not explicitly provided, but the low leverage is a positive aspect, providing some financial stability.55
Neutral
Cash Flow
Zai Lab's cash flow statement reveals challenges with negative operating cash flow and free cash flow, although the free cash flow to net income ratio is positive at 1.32 TTM. The free cash flow growth rate is negative at -9.05% TTM, indicating a decline in cash generation capabilities. The company needs to improve cash flow management to support its operations and growth.40
Negative
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 441.63M | 398.99M | 266.72M | 215.04M | 144.31M | 48.96M |
| Gross Profit | 270.79M | 251.13M | 170.90M | 141.02M | 92.07M | -190.49M |
| EBITDA | -185.62M | -234.57M | -365.11M | -434.84M | -689.46M | -297.16M |
| Net Income | -206.81M | -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 | 717.15M | 779.67M | 806.45M | 1.01B | 1.41B | 1.19B |
| Total Debt | 219.36M | 153.47M | 15.15M | 20.39M | 15.54M | 18.60M |
| Total Liabilities | 399.00M | 344.86M | 240.18M | 174.54M | 230.00M | 128.29M |
| Stockholders Equity | 759.95M | 840.90M | 796.12M | 1.05B | 1.38B | 1.17B |
Cash Flow | ||||||
| Free Cash Flow | -206.79M | -276.39M | -206.67M | -392.63M | -568.18M | -226.72M |
| Operating Cash Flow | -180.54M | -214.87M | -198.18M | -367.64M | -549.23M | -216.06M |
| Investing Cash Flow | -28.59M | -375.19M | -10.78M | 420.02M | 249.96M | -554.83M |
| Financing Cash Flow | 310.60M | 349.89M | -6.43M | -1.73M | 820.20M | 1.13B |
Zai Lab Technical Analysis
Negative
17.00
Price Trends
18.26
Negative
23.19
Negative
28.71
Negative
Market Momentum
-0.56
Positive
40.52
Neutral
36.56
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ZLAB, the sentiment is Negative. The current price of 17 is below the 20-day moving average (MA) of 17.90, below the 50-day MA of 18.26, and below the 200-day MA of 28.71, indicating a bearish trend. The MACD of -0.56 indicates Positive momentum. The RSI at 40.52 is Neutral, neither overbought nor oversold. The STOCH value of 36.56 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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
UnderperformOutperform
Sector (51)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | $7.80B | 40.14 | 19.66% | ― | 54.51% | 275.94% | |
75 Outperform | $4.10B | 15.09 | 34.95% | ― | 12.69% | 100.80% | |
70 Outperform | $5.93B | 8.46 | ― | ― | 97.54% | ― | |
51 Neutral | $7.86B | -0.30 | -43.30% | 2.27% | 22.53% | -2.21% | |
48 Neutral | $1.90B | -8.71 | -28.97% | ― | 23.73% | 30.16% | |
40 Underperform | $4.01B | -17.08 | -47.18% | ― | -76.96% | -425.41% |
* Healthcare Sector Average
ZLAB
Zai Lab
16.98
-10.83
-38.94%
ACAD
ACADIA Pharmaceuticals
23.46
4.33
22.63%
PTCT
PTC Therapeutics
72.36
22.57
45.33%
KRYS
Krystal Biotech
267.64
106.58
66.17%
ACLX
Arcellx Inc
66.94
-1.30
-1.91%
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.