Zai Lab (NASDAQ:ZLAB) Shares Gap Down - Here's Why

Key Points

• Zai Lab shares fell sharply, opening at $23.10 versus a prior close of $24.34 and last trading near $22.65.
• Analyst sentiment remains generally positive: the stock has a consensus “Moderate Buy” rating and a $37.25 target price, well above its recent trading level.
• The company remains unprofitable, reporting a quarterly loss of $0.50 per share, a negative net margin of 41.86%, and analysts expecting a full-year loss of $2.37 per share.

Shares of Zai Lab Limited Unsponsored ADR (NASDAQ:ZLAB - Get Free Report) gapped down prior to trading on Tuesday. The stock had previously closed at $24.34, but opened at $23.10. Zai Lab shares last traded at $22.6470, with a volume of 150,486 shares changing hands.

Wall Street Analysts Forecast Growth

A number of equities analysts recently commented on the company. Cantor Fitzgerald reiterated an "overweight" rating on shares of Zai Lab in a report on Tuesday, October 6th. Wall Street Zen upgraded Zai Lab from a "sell" rating to a "hold" rating in a research note on Saturday, September 26th. Citigroup boosted their target price on Zai Lab from $44.00 to $45.00 and gave the stock a "buy" rating in a report on Friday, August 7th. Weiss Ratings upgraded Zai Lab from a "sell (e+)" rating to a "sell (d-)" rating in a research note on Wednesday, July 29th. Finally, Zacks Research raised Zai Lab from a "strong sell" rating to a "hold" rating in a report on Tuesday, July 7th. One analyst has rated the stock with a Strong Buy rating, four have issued a Buy rating, one has assigned a Hold rating and one has issued a Sell rating to the company. Based on data from MarketBeat, Zai Lab currently has a consensus rating of "Moderate Buy" and a consensus target price of $37.25.

Zai Lab Price Performance

The stock's 50-day moving average price is $25.20 and its 200-day moving average price is $20.87. The company has a market cap of $2.66 billion, a P/E ratio of -13.65 and a beta of 0.73.

Zai Lab (NASDAQ:ZLAB - Get Free Report) last released its quarterly earnings results on Tuesday, June 30th. The company reported ($0.50) earnings per share for the quarter. Zai Lab had a negative net margin of 41.86% and a negative return on equity of 27.43%. The business had revenue of $106.31 million during the quarter. As a group, analysts expect that Zai Lab Limited Unsponsored ADR will post -2.37 EPS for the current fiscal year.

Insider Transactions at Zai Lab

In other news, Director William Lis sold 8,506 shares of the firm's stock in a transaction on Wednesday, August 12th. The shares were sold at an average price of $25.00, for a total transaction of $212,650.00. Following the completion of the transaction, the director owned 41,931 shares of the company's stock, valued at approximately $1,048,275. This trade represents a 16.86% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is accessible through the SEC website. In the last ninety days, insiders have sold 9,385 shares of company stock valued at $235,145. Corporate insiders own 4.88% of the company's stock.

Institutional Trading of Zai Lab

Several institutional investors have recently added to or reduced their stakes in the stock. Seven Fleet Capital Management LP boosted its stake in Zai Lab by 74.7% during the 2nd quarter. Seven Fleet Capital Management LP now owns 136,016 shares of the company's stock valued at $2,584,000 after purchasing an additional 58,158 shares during the last quarter. Headlands Technologies LLC increased its stake in shares of Zai Lab by 142.0% in the second quarter. Headlands Technologies LLC now owns 68,010 shares of the company's stock worth $1,292,000 after purchasing an additional 39,901 shares in the last quarter. WealthPlan Investment Management LLC purchased a new position in shares of Zai Lab in the third quarter valued at $969,000. Finally, Nykredit A S purchased a new position in Zai Lab during the second quarter valued at approximately $79,000. 41.65% of the stock is currently owned by institutional investors.

About Zai Lab

Zai Lab Ltd. NASDAQ: ZLAB is a biopharmaceutical company focused on discovering, developing and commercializing medicines for cancer and other serious diseases. Its research and development activities have included oncology, autoimmune and inflammatory disorders, neuroscience, infectious diseases and other areas of significant unmet medical need.

Founded in 2014, Zai Lab has built its business through a combination of internally developed programs and licensing or collaboration agreements with international pharmaceutical and biotechnology companies.

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