Zai Lab (NASDAQ:ZLAB) Shares Gap Up - Time to Buy?

Key Points

• Zai Lab shares opened higher, rising from a prior close of $23.51 to $24.55 before trading around $24.05. The company has a $2.73 billion market capitalization and trades below its 50-day moving average but above its 200-day average.
• Analyst sentiment is generally positive: Zai Lab has a consensus rating of “Moderate Buy” and an average price target of $37.25, including Citigroup’s increased target of $45.
• The company remains unprofitable, reporting a quarterly loss of $0.50 per share, a negative net margin of 41.86%, and negative return on equity. Insiders have recently sold shares, while institutional investors own 41.65% of the stock.

Shares of Zai Lab Limited Unsponsored ADR (NASDAQ:ZLAB - Get Free Report) gapped up prior to trading on Friday. The stock had previously closed at $23.51, but opened at $24.55. Zai Lab shares last traded at $24.0540, with a volume of 196,562 shares.

Analyst Upgrades and Downgrades

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

Zai Lab Stock Up 1.9%

The firm's 50 day simple moving average is $25.39 and its 200 day simple moving average is $21.62. The company has a market capitalization of $2.73 billion, a PE ratio of -14.02 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) EPS for the quarter. Zai Lab had a negative return on equity of 27.43% and a negative net margin of 41.86%. The company had revenue of $106.31 million during the quarter. As a group, sell-side analysts predict that Zai Lab Limited Unsponsored ADR will post -2.37 EPS for the current fiscal year.

Insider Activity

In other news, Director William Lis sold 8,506 shares of the company's stock in a transaction that occurred on Wednesday, August 12th. The stock was sold at an average price of $25.00, for a total value of $212,650.00. Following the completion of the sale, the director directly owned 41,931 shares in the company, valued at $1,048,275. This represents a 16.86% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is available at this link. Insiders have sold a total of 9,385 shares of company stock worth $235,145 over the last ninety days. 4.88% of the stock is owned by corporate insiders.

Institutional Trading of Zai Lab

Hedge funds have recently added to or reduced their stakes in the company. Headlands Technologies LLC boosted its stake in Zai Lab by 142.0% in the second quarter. Headlands Technologies LLC now owns 68,010 shares of the company's stock valued at $1,292,000 after acquiring an additional 39,901 shares in the last quarter. Seven Fleet Capital Management LP raised its position in Zai Lab by 74.7% during the second quarter. Seven Fleet Capital Management LP now owns 136,016 shares of the company's stock worth $2,584,000 after acquiring an additional 58,158 shares during the last quarter. WealthPlan Investment Management LLC acquired a new position in Zai Lab in the 3rd quarter valued at about $969,000. Finally, Nykredit A S acquired a new position in Zai Lab in the 2nd quarter valued at $79,000. Institutional investors and hedge funds own 41.65% of the company's stock.

About Zai Lab

Zai Lab Ltd. NASDAQ: ZLAB is a biopharmaceutical company focused on discovering, developing and commercializing medicines for serious diseases with significant unmet medical needs. The company's research and development activities span oncology, autoimmune and inflammatory disorders, infectious diseases, and neuroscience.

Founded in 2014 by Samantha Du, Zai Lab has built a portfolio through internal research as well as licensing and collaboration agreements with international pharmaceutical and biotechnology companies.

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