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Zai Lab (ZLAB)
NASDAQ:ZLAB
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Zai Lab
(NASDAQ:ZLAB)
52Neutral
Positive Factors
Earnings
Zai Lab delivered revenue of US$106.5mn, representing YoY growth of 22%.
Patient Volume
ZLAB noted that the patient volumes have rebounded, and the company anticipates a return to strong sequential growth throughout the rest of the year.
Pipeline Development
The upcoming data update for ZL-1310 in small-cell lung cancer at a major annual meeting could influence the company's stock favorably.
Negative Factors
Competitive Landscape
The presence of more competitors in Zai Lab's core product market offsets the potential benefits of its products nearing commercialization.
Revenue Performance
Product revenues for 1Q25 of $105.7M were below the company-provided consensus estimate of $113.9M and were down ~2.6% QoQ from $108.5M in 4Q24.
Zai Lab (ZLAB) vs. S&P 500 (SPY)
Market Cap
$3.23B
Dividend YieldN/A
Average Volume (3M)1.39M
Price to Earnings (P/E)―
Beta (1Y)0.99
Revenue Growth43.72%
EPS Growth28.63%
CountryUS
Employees1,869
SectorHealthcare
Sector Strength41
IndustryBiotechnology
Share Statistics
EPS (TTM)-0.04
Shares Outstanding110,328,380
10 Day Avg. Volume1,055,826
30 Day Avg. Volume1,387,876
Financial Highlights & Ratios
PEG Ratio-0.18
Price to Book (P/B)0.35
Price to Sales (P/S)0.00
P/FCF Ratio-1.16
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue0.02
Enterprise Value/Gross Profit0.10
Enterprise Value/Ebitda-0.02
Forecast
1Y Price Target
$52.65Price Target Upside59.59% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering6
Zai Lab Business Overview & Revenue Model
Company DescriptionZai Lab Limited (NASDAQ: ZLAB) is a leading, innovative biopharmaceutical company headquartered in Shanghai, China. The company is dedicated to the development and commercialization of innovative therapies that address medical needs in oncology, autoimmune, and infectious diseases. Zai Lab focuses on bringing transformative medicines to patients in China and around the world, leveraging its strong R&D capabilities and strategic partnerships with global pharmaceutical companies.
How the Company Makes MoneyZai Lab makes money through the development, commercialization, and sales of its pharmaceutical products. The company's revenue model includes income generated from the sale of drugs and therapies, primarily in the areas of oncology, autoimmune disorders, and infectious diseases. Additionally, Zai Lab engages in strategic collaborations and partnerships with global pharmaceutical companies, which provide upfront payments, milestone payments, and royalties. These partnerships are crucial for accessing advanced technologies and expanding the company's product pipeline, thereby contributing significantly to its revenue streams.
Zai Lab Financial Statement Overview
Summary
Zai Lab exhibits robust revenue growth but continues to face profitability challenges with negative net income and cash flow. The balance sheet is stable with low leverage, which is beneficial for a capital-intensive industry like biotechnology. However, the company's reliance on external financing and ongoing losses could pose future risks.Income Statement
Zai Lab has shown consistent revenue growth over the years, with a significant increase from $12.98 million in 2019 to $398.99 million in 2024, reflecting a strong upward trajectory. However, the company is still facing considerable losses, with negative EBIT and net income margins, indicating ongoing profitability challenges. The net profit margin remains in negative territory, at -64.45% for 2024, suggesting that the company is still struggling to turn its revenue growth into profitability.40
Negative
Balance Sheet
The balance sheet shows a stable equity position with stockholders' equity of $840.90 million in 2024. The debt-to-equity ratio is low at 0.18, indicating low leverage and financial stability. However, the return on equity is negative due to the company's ongoing losses, which is a concern for long-term profitability. The equity ratio remains strong at 70.93%, reflecting a solid asset base funded by equity.55
Neutral
Cash Flow
The company has demonstrated some improvements in free cash flow, but it remains negative at -$220.53 million in 2024. Operating cash flow has improved slightly but is still negative, showing that the company is not yet generating positive cash from its operations. The cash flow from financing activities is positive, indicating that the company has been able to raise funds, but reliance on external funding is significant. The free cash flow to net income ratio is unfavorable due to the negative net income.45
Neutral
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 398.99M | 266.72M | 215.04M | 144.31M | 48.96M | Gross Profit |
| 251.13M | 170.90M | 141.02M | 92.07M | 32.22M | EBIT |
| -282.12M | -366.57M | -404.36M | -700.06M | -301.80M | EBITDA |
| -234.57M | -365.11M | -384.66M | -689.46M | -262.96M | Net Income Common Stockholders |
| -257.10M | -334.62M | -481.99M | -692.44M | -298.16M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 779.67M | 806.45M | 1.01B | 1.41B | 1.19B | Total Assets |
| 1.19B | 1.04B | 1.22B | 1.61B | 1.30B | Total Debt |
| 153.47M | 15.15M | 20.39M | 15.54M | 18.60M | Net Debt |
| -296.20M | -775.00M | -988.08M | -948.56M | -423.52M | Total Liabilities |
| 344.86M | 240.18M | 174.54M | 230.00M | 128.29M | Stockholders Equity |
| 840.90M | 796.12M | 1.05B | 1.38B | 1.17B |
| Cash Flow | Free Cash Flow | |||
| -276.39M | -206.67M | -392.63M | -568.18M | -226.72M | Operating Cash Flow |
| -214.87M | -198.18M | -367.64M | -549.23M | -216.06M | Investing Cash Flow |
| -375.19M | -10.78M | 420.02M | 249.96M | -554.83M | Financing Cash Flow |
| 349.89M | -6.43M | -1.73M | 820.20M | 1.13B |
Zai Lab Technical Analysis
Positive
32.99
Price Trends
32.51
Positive
30.50
Positive
27.38
Positive
Market Momentum
-0.45
Negative
58.37
Neutral
76.86
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 32.99 is above the 20-day moving average (MA) of 30.81, above the 50-day MA of 32.51, and above the 200-day MA of 27.38, indicating a bullish trend. The MACD of -0.45 indicates Negative momentum. The RSI at 58.37 is Neutral, neither overbought nor oversold. The STOCH value of 76.86 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 (52)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $5.42B | 26.43 | 15.38% | ― | 16.98% | -17.76% | |
75 Outperform | $6.57B | 17.64 | 6.01% | ― | 1.42% | ― | |
68 Neutral | $3.63B | 147.81 | 5.88% | ― | 2.78% | -54.72% | |
68 Neutral | $3.65B | 7.07 | 33.08% | ― | 91.12% | ― | |
52 Neutral | $5.19B | 3.04 | -44.64% | 2.82% | 16.45% | -0.53% | |
52 Neutral | $3.23B | ― | -32.05% | ― | 43.72% | 28.63% | |
52 Neutral | $3.66B | ― | -34.19% | ― | -17.87% | -1.89% |
* Healthcare Sector Average
Performance Comparison
ZLAB
Zai Lab
32.99
12.15
58.30%
OPCH
Option Care Health
33.09
4.03
13.87%
PTCT
PTC Therapeutics
46.96
6.84
17.05%
ELAN
Elanco Animal Health
13.22
-3.78
-22.24%
RNA
Avidity Biosciences
30.22
0.98
3.35%
SHC
Sotera Health
12.74
1.65
14.88%
Zai Lab Earnings Call Summary
Earnings Call Date:May 08, 2025
(Q1-2025)
| % Change Since: 16.33%|
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.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
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.