Is this U.S.-China selloff a buy? A top Wall Street voice weighs in
On Monday, Benchmark analysts maintained their Hold rating on AbCellera Biologics (NASDAQ:ABCL) shares, without altering the price target. The decision followed the company’s release of its fourth-quarter financial results for the year ending December 31, 2024. According to InvestingPro data, ABCL currently trades at $2.53, near its 52-week low, having declined about 14% in the past week alone. AbCellera reported quarterly revenues of $5.1 million and a net loss of $0.12 per share. These figures reflect a decrease from the $9.2 million revenue and $0.16 net loss per share reported in the same period the previous year. While the company maintains a strong balance sheet with a current ratio of 9.81 and more cash than debt, InvestingPro analysis indicates the company is quickly burning through its cash reserves.
For the full fiscal year of 2024, AbCellera Biologics experienced a decline in annual revenue, reporting $28.8 million compared to $38.0 million in 2023. The net loss per share for the year was $0.55, slightly wider than the $0.51 loss per share from the previous year. According to InvestingPro, analysts anticipate further sales decline and continued unprofitability in the current year. Despite the downturn in revenue and the increased net loss, the company highlighted some positive developments in the fourth quarter.
AbCellera’s fourth quarter saw the initiation of one new development partnership and the progress of two partnered molecules entering clinical trials. Additionally, there was clinical advancement reported from Abdera, AbCellera’s partner and investment. These steps forward come as AbCellera continues its transition into a clinical-stage biotechnology company.
In their commentary, Benchmark analysts cited these key developments and the company’s transition as the basis for maintaining the Hold rating on AbCellera shares. The analysts did not provide a specific price target in their assessment. As of now, AbCellera Biologics is navigating the challenges of moving into a new phase of its growth as a biotech firm, with its stock rating reflecting a cautious outlook from Benchmark.
In other recent news, AbCellera Biologics reported a revenue shortfall for the fourth quarter of 2024, with actual earnings of $5.1 million falling below the forecasted $7.58 million. The company’s full-year revenue also decreased to $29 million from $38 million in the previous year. Despite these challenges, AbCellera maintains a strong cash position with over $650 million in cash, cash equivalents, and marketable securities. The company is transitioning to a clinical-stage biotech, focusing on internal program development and reducing new discovery partnership activities. AbCellera has announced a new partnership with AbbVie (NYSE:ABBV) on a T-cell engager platform, marking a strategic shift in its collaboration efforts. Analysts from firms such as BMO and Stifel have shown interest in the company’s indication-agnostic approach and its strategy for building clinical development teams. Additionally, AbCellera plans to advance two lead programs, ABCL-635 and ABCL-575, with clinical trial applications (CTAs) scheduled for the second quarter of 2025. The company expects to have sufficient liquidity to fund its pipeline investments for the next three years.
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