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

Key Points

• Zai Lab's stock price gapped down from $38.72 to $34.48 prior to trading on Thursday, with a last trade at $34.21.
• Wall Street analysts hold a mixed view, with an average rating of "Moderate Buy" and a consensus target price of $54.28, despite a recent downgrade from a "buy" to a "hold" rating.
• Insider selling activity included Director William Lis selling 13,814 shares, resulting in a 28.24% decrease in his ownership of Zai Lab stock.

Zai Lab Limited Unsponsored ADR (NASDAQ:ZLAB - Get Free Report) shares gapped down prior to trading on Thursday . The stock had previously closed at $38.72, but opened at $34.48. Zai Lab shares last traded at $34.21, with a volume of 338,761 shares changing hands.

Wall Street Analyst Weigh In

A number of brokerages recently issued reports on ZLAB. Leerink Partners set a $75.00 price objective on shares of Zai Lab and gave the company an "outperform" rating in a report on Monday, June 30th. Wall Street Zen lowered shares of Zai Lab from a "buy" rating to a "hold" rating in a research note on Friday, June 27th. Finally, Citigroup reaffirmed a "buy" rating and set a $69.00 target price (up previously from $66.00) on shares of Zai Lab in a research note on Monday. Two research analysts have rated the stock with a hold rating and five have issued a buy rating to the company. According to MarketBeat.com, the stock has a consensus rating of "Moderate Buy" and an average target price of $57.22.

Zai Lab Stock Down 0.9%

The firm has a market cap of $3.85 billion, a price-to-earnings ratio of -16.99 and a beta of 1.03. The company's 50-day moving average price is $36.70 and its 200-day moving average price is $33.36.

Zai Lab (NASDAQ:ZLAB - Get Free Report) last issued its quarterly earnings results on Thursday, August 7th. The company reported ($0.37) earnings per share (EPS) for the quarter, hitting the consensus estimate of ($0.37). The business had revenue of $109.98 million for the quarter, compared to analysts' expectations of $125.66 million. Zai Lab had a negative net margin of 49.68% and a negative return on equity of 27.32%. On average, sell-side analysts predict that Zai Lab Limited Unsponsored ADR will post -2.58 earnings per share for the current fiscal year.

Insider Activity at Zai Lab

In related news, CEO Ying Du sold 7,072 shares of the firm's stock in a transaction that occurred on Wednesday, July 2nd. The shares were sold at an average price of $35.23, for a total value of $249,146.56. Following the sale, the chief executive officer owned 536,962 shares of the company's stock, valued at $18,917,171.26. This trade represents a 1.30% decrease in their ownership of the stock. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which is available through this hyperlink. Also, Director William Lis sold 13,814 shares of the firm's stock in a transaction that occurred on Friday, June 20th. The shares were sold at an average price of $35.67, for a total transaction of $492,745.38. Following the completion of the sale, the director directly owned 35,106 shares in the company, valued at approximately $1,252,231.02. This trade represents a 28.24% decrease in their position. The disclosure for this sale can be found here. Insiders have sold a total of 160,155 shares of company stock valued at $4,959,535 over the last 90 days. 4.96% of the stock is owned by corporate insiders.

Institutional Trading of Zai Lab

Hedge funds and other institutional investors have recently added to or reduced their stakes in the stock. Oppenheimer Asset Management Inc. acquired a new stake in Zai Lab during the first quarter worth approximately $603,000. BNP Paribas Financial Markets raised its holdings in Zai Lab by 1,439.8% during the fourth quarter. BNP Paribas Financial Markets now owns 19,755 shares of the company's stock worth $517,000 after purchasing an additional 18,472 shares in the last quarter. FMR LLC raised its holdings in Zai Lab by 749.1% during the fourth quarter. FMR LLC now owns 5,475,505 shares of the company's stock worth $143,403,000 after purchasing an additional 4,830,646 shares in the last quarter. Wells Fargo & Company MN raised its holdings in Zai Lab by 8,090.8% during the fourth quarter. Wells Fargo & Company MN now owns 40,954 shares of the company's stock worth $1,073,000 after purchasing an additional 40,454 shares in the last quarter. Finally, Envestnet Asset Management Inc. acquired a new stake in Zai Lab during the fourth quarter worth approximately $976,000. Institutional investors and hedge funds own 41.65% of the company's stock.

Zai Lab Company Profile

Zai Lab Limited develops and commercializes therapies to treat oncology, autoimmune disorders, infectious diseases, and neuroscience. Its commercial products include Zejula, an orally administered poly polymerase 1/2 inhibitor; Optune, a cancer therapy that uses electric fields tuned to specific frequencies to kill tumor cells; NUZYRA for acute bacterial skin and skin structure infections, and community acquired bacterial pneumonia; Qinlock to treat gastrointestinal stromal tumors, and VYVGART, a human IgG1 antibody fragment for myesthenia gravis.