Zai Lab (NASDAQ:ZLAB) Shares Up 14.5% on Strong Earnings

Key Points

• Zai Lab shares jumped 14.5% after the company reported quarterly EPS of a $0.50 loss, beating estimates for a $0.68 loss, while revenue of $106.31 million also exceeded forecasts.
• Analysts maintain a generally positive outlook, with the stock carrying a “Moderate Buy” consensus rating and an average price target of $40, despite some recent rating and target-price cuts.
• The company remains unprofitable, reporting a negative net margin of 39.29% and negative return on equity of 24.32%; insiders sold 90,873 shares worth $1.73 million during the latest quarter.

Zai Lab Limited Unsponsored ADR (NASDAQ:ZLAB - Get Free Report)'s stock price traded up 14.5% during mid-day trading on Thursday following a better than expected earnings announcement. The company traded as high as $20.67 and last traded at $21.0250. Approximately 84,247 shares traded hands during mid-day trading, a decline of 89% from the average session volume of 790,060 shares. The stock had previously closed at $18.37.

The company reported ($0.50) earnings per share (EPS) for the quarter, topping analysts' consensus estimates of ($0.68) by $0.18. Zai Lab had a negative net margin of 39.29% and a negative return on equity of 24.32%. The firm had revenue of $106.31 million for the quarter, compared to the consensus estimate of $103.87 million.

Wall Street Analysts Forecast Growth

Several research analysts have recently issued reports on ZLAB shares. Citigroup cut their target price on shares of Zai Lab from $47.00 to $44.00 and set a "buy" rating on the stock in a report on Friday, May 8th. Zacks Research raised shares of Zai Lab from a "strong sell" rating to a "hold" rating in a research report on Tuesday, July 7th. Weiss Ratings upgraded shares of Zai Lab from a "sell (e+)" rating to a "sell (d-)" rating in a research note on Wednesday, July 29th. Finally, Wall Street Zen cut shares of Zai Lab from a "hold" rating to a "sell" rating in a research note on Saturday, May 16th. One analyst has rated the stock with a Strong Buy rating, four have assigned a Buy rating, one has issued a Hold rating and one has assigned a Sell rating to the company's stock. Based on data from MarketBeat.com, the company currently has an average rating of "Moderate Buy" and an average price target of $40.00.

Insider Activity at Zai Lab

In other news, CFO Yajing Chen sold 2,264 shares of the business's stock in a transaction on Friday, June 26th. The shares were sold at an average price of $17.46, for a total transaction of $39,529.44. Following the completion of the sale, the chief financial officer directly owned 35,691 shares of the company's stock, valued at approximately $623,164.86. The trade was a 5.96% decrease in their ownership of the stock. The sale was disclosed in a document filed with the Securities & Exchange Commission, which can be accessed through this link. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Also, CEO Ying Du sold 50,000 shares of the firm's stock in a transaction on Thursday, May 14th. The stock was sold at an average price of $20.09, for a total value of $1,004,500.00. Following the transaction, the chief executive officer owned 1,122,626 shares in the company, valued at $22,553,556.34. The trade was a 4.26% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. Insiders sold a total of 90,873 shares of company stock worth $1,730,096 in the last quarter. 4.88% of the stock is owned by company insiders.

Institutional Trading of Zai Lab

An institutional investor recently raised its position in Zai Lab stock. SG Americas Securities LLC increased its holdings in Zai Lab Limited Unsponsored ADR (NASDAQ:ZLAB - Free Report) by 6.6% during the 4th quarter, according to the company in its most recent 13F filing with the Securities and Exchange Commission. The firm owned 10,396 shares of the company's stock after buying an additional 642 shares during the quarter. SG Americas Securities LLC's holdings in Zai Lab were worth $183,000 at the end of the most recent reporting period. 41.65% of the stock is owned by institutional investors.

Zai Lab Price Performance

The company has a market capitalization of $2.36 billion, a PE ratio of -12.79 and a beta of 0.78. The firm's fifty day simple moving average is $18.59 and its 200 day simple moving average is $19.20.

About Zai Lab

Zai Lab Ltd NASDAQ: ZLAB is a biopharmaceutical company focused on the research, development, manufacturing and commercialization of innovative therapies. Headquartered in Shanghai, China, Zai Lab operates R&D centers in Asia and the United States and maintains commercial offices across Greater China, North America, Europe and Australia. The company's end-to-end platform encompasses discovery biology, translational development, clinical research and global supply chain management.

The company's marketed portfolio is anchored by Brukinsa (zanubrutinib), a next-generation Bruton's tyrosine kinase inhibitor approved for several B-cell malignancies.

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