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On Wednesday, Citizens JMP made a significant adjustment to its assessment of Allogene Therapeutics, downgrading the stock from Market Outperform to Market Perform. This decision came in the wake of Allogene’s first quarter earnings report and corporate updates, which included a delayed timeline for its ALPHA3 development. The downgrade comes amid challenging market conditions for ALLO, with InvestingPro data showing the stock has declined over 54% in the past six months and is currently trading near its 52-week low of $1.06.
Allogene, trading on (NASDAQ:ALLO), had previously anticipated mid-2025 for its LD selection and futility analyses, but these have now been pushed to the first half of 2026. Analyst Reni Benjamin from Citizens JMP cited the lack of near-term milestones and the extended ALPHA3 development timelines as key reasons for the downgrade. Despite these challenges, InvestingPro analysis reveals the company maintains a strong liquidity position with a current ratio of 9.71 and more cash than debt on its balance sheet.
The potential of Allogene’s cema-cel in the frontline Large B-Cell Lymphoma (LBCL) setting remains recognized, yet uncertainties regarding enrollment and the protracted development schedule have led to the removal of ALLO-501A revenue projections from Citizens JMP’s valuation model. ALLO-501A was the leading program influencing their valuation methodology.
Following the update, Allogene’s shares are expected to align with market performance until the completion of enrollment for Part A of their study. This anticipation is reflected in the current Market Perform rating, which is grounded on the stock trading at approximately 74% of its ending cash position for the first quarter of 2025. According to Citizens JMP, this valuation represents fair value and is consistent with the discount applied to other biotech firms facing similar uncertainties. Trading at 0.64 times book value, InvestingPro analysis suggests the stock may be undervalued, with 12 additional exclusive ProTips available to subscribers. Discover comprehensive analysis and Fair Value estimates for over 1,400 stocks with an InvestingPro subscription.
The company’s enterprise value is currently in negative territory, at around -$88 million. Without the near-term catalyst of the ALPHA3 LD selection, the outlook for the stock is to trade in step with the general market until further progress is reported.
In other recent news, Allogene Therapeutics reported a net loss of $59.7 million for the first quarter of 2025, equating to a loss of $0.28 per share, which closely matched analysts’ predictions of $0.2864 per share. The company maintains a strong cash position with $335.5 million as of March 31, 2025, and has set a revenue forecast of $2.22 billion. Allogene is projecting a cash burn of approximately $150 million for 2025 and expects full-year GAAP operating expenses to be around $230 million. The company is actively expanding its ALPHA3 trial internationally, aiming to enhance its clinical trials, which could drive future growth. Analysts from firms like Jefferies and TD Cowen have shown interest in the progress of Allogene’s trials, particularly the ALPHA3 and ALLO-329 trials, with expectations for proof of concept data in the first half of 2026. The company has also emphasized its strategy to innovate in the CAR T therapy space, with a focus on oncology and autoimmune diseases. Allogene’s CEO, David Chang, highlighted the company’s commitment to challenging conventional approaches and expanding its clinical trials internationally.
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