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AbCellera Biologics stock upgraded to Buy on Q4 results, R&D progress

EditorRachael Rajan
Published 02/22/2024, 10:44 AM
© Reuters.

On Thursday, Benchmark upgraded shares of AbCellera Biologics (NASDAQ:ABCL) from Hold to Buy. AbCellera's fourth-quarter financial results showed a decline in revenue to $9.2 million from $21.5 million the previous year. The company also reported a net loss of $47.4 million, or $0.16 per share, which is larger than the $30.6 million, or $0.10 per share, loss reported in the same quarter of the previous year.

The reported revenue surpassed the analyst's expectations, which were set at $6.8 million, while the net loss was greater than the anticipated $0.11 per share. The previous year's results had included $9.5 million in COVID-related royalties, which contributed to the year-over-year difference.

"We are raising our rating on ABCL shares to Buy with a $9 price target due to improved metrics for other stocks as well as R&D progress for the company," said the analyst.

Despite the reported losses, AbCellera highlighted several positive developments in the quarter, including the initiation of three new partnered program starts. Additionally, two of the company's proprietary research and development programs began Investigational New Drug (IND)-enabling studies, and three partnered molecules started clinical trials.

InvestingPro Insights

AbCellera Biologics (NASDAQ:ABCL) is navigating through a challenging financial period, as indicated by the InvestingPro data. With a market capitalization of $1.42 billion, the company's valuation reflects investors' tempered expectations. The revenue for the last twelve months as of Q4 2023 stood at $38.02 million, a stark decrease of 92.17% from the previous year, highlighting the company's struggle to maintain its top-line growth. This aligns with the net loss reported in the recent quarterly results, where the company saw a larger loss than the same quarter of the previous year.

The company's P/E ratio, adjusted for the last twelve months as of Q4 2023, is -9.52, underscoring the market's sentiment about its earnings potential. This is reflected in the InvestingPro Tips, which reveal that analysts have revised their earnings downward for the upcoming period and anticipate a sales decline in the current year. Additionally, AbCellera does not pay a dividend, which might affect its attractiveness to income-seeking investors.

Despite the revenue challenges, AbCellera holds more cash than debt on its balance sheet, which is a positive sign of financial stability. This is an important consideration for investors looking for companies with a solid financial footing in uncertain times. For those interested in a deeper analysis, there are additional InvestingPro Tips available, including insights on the company's expected profitability and liquid assets in comparison to short-term obligations.

For readers looking to make informed investment decisions, InvestingPro offers further insights and metrics on AbCellera Biologics. To learn more about the company's financial health and future prospects, visit https://www.investing.com/pro/ABCL. And remember, you can use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, which includes access to comprehensive tips—currently, there are six more tips listed on InvestingPro that could guide your investment strategy.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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