Puneet Souda, an analyst from Leerink Partners, reiterated the Buy rating on OmniAb (OABI – Research Report). The associated price target was raised to $10.00.
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Puneet Souda has given his Buy rating due to a combination of factors that highlight OmniAb’s potential for significant growth. The company is positioned to benefit from over $100 million in milestones and royalties, particularly from IMVT’s IMVT-1402 and batoclimab sales, alongside more than 50 other assets in the post-discovery phase. OmniAb’s unique and diverse animal models have driven a 12% compound annual growth rate in their partner pipeline over three years, showcasing the company’s ability to thrive even in challenging funding environments.
Puneet Souda also notes that OmniAb’s new xPloration instrument offers additional upside potential without incurring significant marketing expenses, as it is targeted at existing discovery partners. The company’s flexible business model allows it to adapt to market conditions by adjusting deal terms or offering outsourced discovery services, which helps mitigate risks. Despite concerns about cash balance versus cash burn, management’s confidence in achieving cash flow profitability through milestone achievements supports the positive outlook. Consequently, the price target has been raised to $10, reflecting stronger margin expectations in the coming years.
In another report released on May 12, Benchmark Co. also maintained a Buy rating on the stock with a $6.00 price target.
Based on the recent corporate insider activity of 32 insiders, corporate insider sentiment is positive on the stock. This means that over the past quarter there has been an increase of insiders buying their shares of OABI in relation to earlier this year.