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On Wednesday, H.C. Wainwright analyst Debjit Chattopadhyay adjusted the price target for Allogene Therapeutics, Inc. (NASDAQ:ALLO) to $8.00, a decrease from the previous target of $9.00, while reiterating a Buy rating on the company’s shares. The stock, currently trading at $1.69, has experienced significant pressure, declining nearly 18% in the past week and 61.5% over the last year. According to InvestingPro data, analyst targets for ALLO range from $3 to $14, with two analysts recently revising their earnings estimates upward for the upcoming period. The revision reflects the removal of ALLO-715, one of Allogene’s pipeline products, from the firm’s discounted cash flow (DCF)-based valuation model. While the company maintains a strong liquidity position with a current ratio of 8.54 and more cash than debt on its balance sheet, InvestingPro analysis indicates the company is quickly burning through its cash reserves.
Chattopadhyay highlighted several upcoming catalysts for Allogene that investors should consider. These include a lymphodepletion selection and futility analysis in the ALPHA3 trial, anticipated for mid-2025, and additional results from the Phase 1b expansion cohort of ALLO-316 in Renal Cell Carcinoma (RCC) expected around the same time. Furthermore, the initiation of a Phase 1 trial for ALLO-329 in autoimmune disease is planned for mid-2025, with proof-of-concept data projected by the end of the year.
The analyst emphasized the potential of Allogene’s DAGGER technology, which has been clinically validated through the ALLO-316 program, to address one of the major challenges in CAR T therapy for immune disorders, namely lymphoid depletion. The analyst’s confidence in the technology’s ability to overcome this barrier is evident in the continued Buy rating.
Chattopadhyay also noted that currently, H.C. Wainwright’s valuation does not incorporate risk-adjusted revenues for any of Allogene’s pipeline products beyond cema-cel. This conservative approach to valuation indicates a focus on the most advanced and near-term product candidate.
In summary, while the price target for Allogene has been lowered to $8, the analyst maintains a positive outlook on the stock, supported by the company’s upcoming clinical milestones and the potential of its innovative technology in the burgeoning field of CAR T therapies. Despite trading below book value with a P/B ratio of 0.87, InvestingPro analysis reveals a weak overall financial health score of 1.5, with additional insights available in the comprehensive Pro Research Report, which provides deep-dive analysis of this and 1,400+ other US stocks.
In other recent news, Allogene Therapeutics reported a narrower-than-expected loss for the fourth quarter of 2024, with an earnings per share (EPS) of -$0.28, surpassing the forecast of -$0.32. The company’s robust financial position includes a cash reserve of $373 million, which is expected to support its operations into 2026. Analysts have shown confidence in Allogene’s clinical trials, with Citi maintaining a Buy rating and a price target of $8, reflecting optimism about the company’s ALPHA3 clinical study. The study is evaluating the efficacy of cema-cel in patients with large B-cell lymphoma, with pivotal data anticipated by the end of 2026.
Citizens JMP also upgraded Allogene’s stock rating from Market Perform to Market Outperform, setting a new price target of $5. This upgrade is based on promising clinical trial results, including a 100% complete response rate in low disease burden patients. The ALPHA3 trial is expected to undergo a futility assessment in mid-2025, which is being closely watched by investors. Additionally, Allogene is advancing its pipeline with the Phase 1 RESOLUTION basket trial for ALLO-329 in autoimmune diseases, expected to start mid-2025. The company is also progressing with its ALLO-316 trial in renal cell carcinoma, with data from the Phase 1b expansion cohort anticipated by mid-2025.
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