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Tuesday, BofA Securities downgraded Y-mAbs Therapeutics (NASDAQ:YMAB) stock from Neutral to Underperform and significantly reduced the price target to $3.00 from the previous $12.00. The revision reflects the firm’s concerns over several challenges faced by the company, including the underperformance of its flagship product and potential financial strains. According to InvestingPro data, the stock has declined nearly 68% over the past year, with three analysts recently revising their earnings expectations downward for the upcoming period.
The downgrade is primarily attributed to the lackluster launch of Danyelza, an antibody treatment for high-risk neuroblastoma, a type of nerve cancer. BofA Securities analysts believe that despite recent global sales partnerships, the benefits to Y-mAbs Therapeutics’ revenue will likely be modest. While the company maintains a strong gross profit margin of 83%, InvestingPro analysis indicates revenue growth has been minimal at 3.4% over the last twelve months, with expectations of a 6% decline in the coming year.
Additionally, BofA Securities expressed caution regarding the development of GD2-SADA, Y-mAbs Therapeutics’ investigational drug for treating solid tumors. While early safety data has been favorable, the firm points out that there is still considerable work required in dose optimization. The analysts suggest that significant progress in de-risking the drug would not be evident until 2026 or later, following an update expected in the second quarter of 2025.
The financial position of Y-mAbs Therapeutics is also a concern for BofA Securities. The analysts warn that the company’s cash reserves may not be sufficient to bridge the funding gap until key milestones are reached that could potentially enhance the company’s value. However, InvestingPro data shows the company maintains more cash than debt on its balance sheet, with a healthy current ratio of 4.16, indicating strong short-term liquidity. Discover more detailed insights and 8 additional ProTips about YMAB’s financial health in the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.
In summary, BofA Securities has downgraded Y-mAbs Therapeutics stock to Underperform from Neutral and reduced the price target to $3.00 from $12.00. The firm’s analysis indicates that the company is facing significant commercial and developmental challenges, along with potential financial constraints, which could affect its performance and stock valuation. Based on InvestingPro’s Fair Value analysis, the stock currently appears undervalued despite these challenges, though investors should note that analysts don’t expect profitability this year.
In other recent news, Y-mAbs Therapeutics has been the focus of several analyst updates and strategic moves. The company announced its fiscal year 2024 revenue of $87.7 million, aligning with market expectations. However, its guidance for 2025 suggests revenues could range between $75 million and $90 million, falling short of previous projections. This prompted Jones Trading to lower its price target from $23 to $18 while maintaining a Buy rating, and Morgan Stanley (NYSE:MS) to cut its target from $11 to $7, maintaining an Underweight rating. Cantor Fitzgerald adjusted its target from $20 to $19, holding an Overweight rating, and BofA Securities reduced its target from $14 to $12, keeping a Neutral rating.
Additionally, Y-mAbs Therapeutics has entered an Equity Distribution Agreement with Oppenheimer & Co. Inc. to potentially offer up to $35 million of its common stock, providing flexibility in financing. The company is also progressing with its business realignment and plans to update its SADA program strategy in mid-2025. Analysts have noted challenges with Danyelza, a key product, but also see potential growth through clinical trials and the development of a GD2 companion diagnostic. Y-mAbs is focusing on its radiopharmaceutical division, which could significantly impact its future performance.
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