Zai Lab Ltd (NASDAQ: ZLAB)

Sector: Healthcare Industry: Biotechnology CIK: 0001704292
P/B 2.55
P/E -9.35
P/S 4.38
Market Cap 1.93 Bn
ROIC (Qtr) -22.77
Div Yield % 0.00
Rev 1y % (Qtr) 13.52
Total Debt (Qtr) 219.36 Mn
Debt/Equity (Qtr) 0.29

About

Zai Lab Ltd (ZLAB), a prominent player in the biopharmaceutical industry, is focused on discovering, developing, and commercializing products that address significant unmet medical needs in the areas of oncology, autoimmune disorders, infectious disease, and neuroscience. The company boasts a strong presence in Greater China, with a significant market share in the oncology and autoimmune disorders markets. Zai Lab's main business activities involve the development and commercialization of pharmaceutical products. The company operates in Greater...

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Analysis

Pros

  • Healthy cash reserves of 817.15M provide 3.92x coverage of short-term debt 208.52M, demonstrating strong liquidity position and minimal refinancing risk.
  • Strong tangible asset base of 1.10B provides 5.02x coverage of total debt 219.36M, indicating robust asset backing and low credit risk.
  • Tangible assets of 1.10B provide exceptional 39.23x coverage of deferred revenue 28.06M, showing strong service capability backing.
  • Operating cash flow of (180.54M) provides strong 40.24x coverage of operating expenses (4.49M), showing operational efficiency.
  • Cash reserves of 817.15M provide solid 2514.32x coverage of other non-current liabilities 325000, indicating strong liquidity.

Cons

  • Investment activities of (28.59M) provide weak support for R&D spending of 211.52M, which is -0.14x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • Operating cash flow of (180.54M) provides insufficient coverage of deferred revenue obligations of 28.06M, which is -6.43x, raising concerns about future service delivery capabilities.
  • The company's operating cash flow of (180.54M) shows concerning coverage of stock compensation expenses of 66.93M, with a -2.70 ratio indicating potential earnings quality issues.
  • Free cash flow of (190.47M) provides weak coverage of capital expenditures of 9.94M, with a -19.16 ratio suggesting additional external financing needs for growth initiatives.
  • Operating earnings of (202.06M) show weak coverage of depreciation charges of 23.69M, with a -8.53 ratio indicating high capital intensity and potential reinvestment needs.

Peer Comparison

Companies in the Biotechnology
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 SMMT Summit Therapeutics Inc. 1,349.40 Bn -1,464.17 0.00 0.01 Bn
2 ONC BeOne Medicines Ltd. 437.43 Bn 6,381.20 87.97 1.90 Bn
3 VRTX Vertex Pharmaceuticals Inc / Ma 116.09 Bn 31.59 9.90 1.83 Bn
4 REGN Regeneron Pharmaceuticals, Inc. 78.10 Bn 17.06 5.48 2.71 Bn
5 ALNY Alnylam Pharmaceuticals, Inc. 55.87 Bn 1,282.42 17.40 3.21 Bn
6 ARGX Argenx Se 52.85 Bn 35.08 27,559.65 -
7 BNTC Benitec Biopharma Inc. 41.75 Bn -998.33 0.00 0.00 Bn
8 INSM INSMED Inc 37.80 Bn -31.93 84.56 0.74 Bn

Industry Comparisons

Current Valuation

Metric Value Industry Percentile
EV to Assets 1.12 12.31
EV to Cash from Ops. -7.16 23.25
EV to Debt 5.90 738.44
EV to EBIT -6.40 -9.16
EV to EBITDA -6.48 6.95
EV to Free Cash Flow [EV/FCF] -6.79 21.90
EV to Market Cap 0.67 65.67
EV to Revenue 2.93 227.32
Price to Book Value [P/B] 2.55 22.34
Price to Earnings [P/E] -9.35 -11.77

Dividend Metrics

Metric Value Industry Percentile
Dividend Coverage Ratio 0.00 -11.94
Dividend Payout Ratio % 0.00 0.16
Dividend per Basic Share 0.00 0.01
FCF Dividend Payout Ratio % 0.00 -0.14
Interest Coverage -42.51 841.00

Growth Metrics

Metric Value Industry Percentile
Capex Growth (1y) % -205.82 -27.13
Cash and Equivalents Growth (1y) % 14.11 734.65
Dividend Growth (1y) % 0.00 0.01
EBIAT Growth (1y) % 25.02 -46.93
EBITDA Growth (1y) % 35.17 -1.68
EBIT Growth (1y) % 25.02 -56.45
EBT Growth (1y) % 23.64 -12.70
EPS Growth (1y) % 29.63 -28.31
FCF Growth (1y) % -7.45 -31.90
Gross Profit Growth (1y) % 20.49 226.84

Liquidity Ratios

Metric Value Industry Percentile
Asset Utilization Ratio 0.38 0.14
Cash Payout Ratio 0.00 0.00
Cash Ratio 2.27 3.85
Current Ratio 2.87 7.27
Debt to Equity Ratio 0.29 0.40
Interest Cover Ratio -42.51 841.00
Times Interest Earned -42.51 841.00

Profitability

Metric Value Industry Percentile
EBITDA Margin % -40.40 -18,234.31
EBIT Margin % -45.75 -18,580.80
EBT Margin % -46.83 -19,488.74
Gross Margin % 61.30 -7.59
Net Profit Margin % -46.80 -19,439.22