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Adagene (ADAG)
NASDAQ:ADAG

Adagene (ADAG) AI Stock Analysis

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Adagene

(NASDAQ:ADAG)

Rating:49Neutral
Price Target:
$2.00
▲(4.17%Upside)
Adagene's overall stock score is significantly impacted by its poor financial performance, which remains the most critical factor. While technical analysis suggests some positive momentum, the lack of profitability and negative valuation metrics weigh heavily on the overall score. Investors should be cautious due to these financial challenges.
Positive Factors
Clinical Development
Adagene remains focused on advancing ADG126 in clinical development and expects to report its durability data on efficacy as well as a regulatory update.
Efficacy and Safety
The promising efficacy and favorable safety profiles for ADG126 plus pembrolizumab reinforce the drug's potential in MSS-CRC and other cancer indications approved for anti-CTLA-4 agents.
Therapeutic Potential
Positive data from the ongoing Phase 1/2 study with ADG126 presented at the American Society of Clinical Oncology Gastrointestinal Cancers Symposium solidifies its therapeutic potential in metastatic microsatellite stable colorectal cancer.
Negative Factors
Market Opportunity
Analyst is moving to the sidelines based on a combination of factors including the relatively small market opportunity, regulatory uncertainty, and safety concerns with targeting CTLA-4.
Regulatory Concerns
Regulatory uncertainty is a concern as another company is testing a similar immunotherapy combination for a similar treatment.
Treatment Challenges
Analyst notes that the target population for the treatment is relatively small and there are challenges with diagnosing peritoneal metastasis, which further complicate the treatment paradigm.

Adagene (ADAG) vs. SPDR S&P 500 ETF (SPY)

Adagene Business Overview & Revenue Model

Company DescriptionAdagene (ADAG) is a biotechnology company that operates in the immunotherapy sector, focusing on the discovery and development of novel antibody-based therapies for the treatment of cancer. The company leverages its proprietary Dynamic Precision Library (DPL) technology platform to design and optimize antibodies with enhanced therapeutic efficacy and safety profiles. Adagene's core products include a pipeline of monoclonal and bispecific antibodies aimed at addressing unmet medical needs in oncology.
How the Company Makes MoneyAdagene makes money primarily through partnerships and collaborations with other biotechnology and pharmaceutical companies. These partnerships often involve milestone payments and royalties based on the successful development and commercialization of antibody-based therapies. Additionally, Adagene may receive funding through licensing agreements for its proprietary technology platforms. The company's revenue model is heavily reliant on these strategic alliances, research and development collaborations, and potential future sales of its own developed therapeutic products.

Adagene Financial Statement Overview

Summary
Adagene faces significant financial challenges with declining revenue, substantial losses, and negative cash flows. The company has a very low net profit margin and negative operating cash flow, indicating severe profitability issues. Despite a manageable debt level, the reduction in equity poses additional risks.
Income Statement
25
Negative
Adagene's income statement reveals significant challenges. The company has experienced a declining revenue trend from 2023 to 2024 with a revenue decrease of 99.4%. The gross profit margin stands at 100%, indicating that all revenue was retained as gross profit. However, the net profit margin is deeply negative at -32383%, reflecting substantial losses relative to revenue. Both EBIT and EBITDA margins are also negative, highlighting profitability issues.
Balance Sheet
40
Negative
Adagene's balance sheet shows a moderate financial position with some concerns. The debt-to-equity ratio is 0.37, indicating a manageable level of debt. However, stockholders' equity has decreased, reflecting potential risk. The equity ratio stands at 56.6%, suggesting reasonable asset financing through equity, yet the negative trends in equity raise concerns.
Cash Flow
35
Negative
The cash flow statement indicates significant challenges. Operating cash flow is negative and worsening, with a free cash flow growth rate of -4.2% from 2023 to 2024. Operating cash flow to net income and free cash flow to net income ratios are unfavorable, reflecting difficulty in generating cash relative to net losses.
Breakdown
Dec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
103.20K18.11M9.29M10.18M480.00K
Gross Profit
-823.04K18.11M9.29M10.18M480.00K
EBIT
-35.95M-23.72M-83.92M-72.36M-19.17M
EBITDA
-31.66M-14.95M-77.39M-69.99M-41.34M
Net Income Common Stockholders
-33.42M-18.95M-79.97M-73.18M-16.44M
Balance SheetCash, Cash Equivalents and Short-Term Investments
85.19M109.93M143.76M174.39M75.15M
Total Assets
89.27M115.73M152.40M189.51M84.26M
Total Debt
18.49M22.31M27.97M7.49M7.98M
Net Debt
-66.70M-87.63M-115.79M-166.90M-67.17M
Total Liabilities
38.74M45.17M69.31M32.95M173.65M
Stockholders Equity
50.52M70.56M83.09M156.56M-89.39M
Cash FlowFree Cash Flow
-29.73M-28.54M-49.30M-45.92M-29.46M
Operating Cash Flow
-29.70M-28.45M-48.61M-43.41M-28.53M
Investing Cash Flow
1.11M-77.36K-686.05K-2.51M7.07M
Financing Cash Flow
3.77M-5.37M17.82M145.36M4.44M

Adagene Technical Analysis

Technical Analysis Sentiment
Positive
Last Price1.92
Price Trends
50DMA
1.69
Positive
100DMA
1.77
Positive
200DMA
2.07
Negative
Market Momentum
MACD
0.07
Positive
RSI
54.17
Neutral
STOCH
54.91
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ADAG, the sentiment is Positive. The current price of 1.92 is above the 20-day moving average (MA) of 1.89, above the 50-day MA of 1.69, and below the 200-day MA of 2.07, indicating a neutral trend. The MACD of 0.07 indicates Positive momentum. The RSI at 54.17 is Neutral, neither overbought nor oversold. The STOCH value of 54.91 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ADAG.

Adagene Risk Analysis

Adagene disclosed 120 risk factors in its most recent earnings report. Adagene 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

Adagene Peers Comparison

Overall Rating
UnderperformOutperform
Sector (54)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
54
Neutral
$5.34B3.36-45.10%3.39%16.81%-0.03%
50
Neutral
$49.92M678.24%-69.59%
49
Neutral
$90.92M-55.14%-99.43%-69.40%
46
Neutral
$104.17M-52.76%-70.31%-11.68%
40
Neutral
$73.34M-245.59%27.36%23.82%
40
Underperform
$51.60M-127.99%37.54%
36
Underperform
$101.23M-76.21%23.55%
* Healthcare Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
ADAG
Adagene
1.95
-1.15
-37.10%
ADVM
Adverum Biotechnologies
2.29
-4.27
-65.09%
AVTX
Avalo Therapeutics
4.76
-8.50
-64.10%
IGMS
IGM Biosciences
1.17
-5.34
-82.03%
CRBU
Caribou Biosciences
1.28
-0.44
-25.58%
TNYA
Tenaya Therapeutics
0.58
-2.61
-81.82%
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.