ADMA Biologics ADMA is scheduled to report third-quarter 2024 results on Nov. 7, after market close.
The Zacks Consensus Estimate for sales and earnings is pegged at $107.25 million and 13 cents per share, respectively.
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Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
ADMA’s Earnings Surprise History
ADMA has an excellent track record. ADMA’s earnings beat estimates in each of the trailing four quarters, delivering an average surprise of 105.63%. In the previously reported quarter, the company’s earnings beat estimates by 62.5%.
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What Our Model Predicts for ADMA
Per our proven model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.
Earnings ESP for ADMA is 0.00%. The company currently carries a Zacks Rank #3. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.
Factors Influencing ADMA’s Q3 Results
ADMA Biologics markets plasma-derived biologics for the treatment of immune deficiencies and the prevention of certain infectious diseases.
The company’s top line currently comprises sales of three FDA-approved products — Bivigam (an Intravenous Immune Globulin [“IVIG”] product to treat primary humoral immunodeficiency), Asceniv (to treat primary immunodeficiency disease or PIDD) and Nabi-HB (to treat and provide enhanced immunity against the hepatitis B virus).
Increased sales of Asceniv have likely fueled the top line in the third quarter.
ADMA’s higher margin product portfolio now accounts for more than 50% of its total revenues. The company is actively implementing measures to increase Asceniv supply. Gross margin in the second quarter jumped to 53.6% from 27.8%. The company has likely achieved the same margin level during the third quarter.
Increased revenues has likely boosted the bottom-line as well.
As in the previous two quarters of 2024, R&D expenses might have declined in the third quarter while SG&A expenses must have increased.
Management raised its revenue and earnings forecast for 2024 and 2025 when it reported first and second-quarter results. Investors will await updates on the financial guidance when the company reports third-quarter results.
ADMA’s Price Performance and Valuation
Shares of ADMA have skyrocketed 322.7% year to date against the industry’s decline of 4%. The stock has outperformed the sector and the S&P 500 in this timeframe. From a price perspective, ADMA is currently tilting toward the high end of the 52-week range.
ADMA Outperforms Industry, Sector & S&P 500
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Going by the price/sales ratio, ADMA’s shares currently trade at 9.89x forward sales, higher than its mean of 3.39x and the industry’s 1.78x.
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Investment Thesis
Asceniv’s strong sales growth is driving the top line. Its prescriber and patient base continued to increase last year and is expected to grow further. Last year, ADMA started manufacturing Asceniv at the 4,400-liter production scale for the first time. This has improved the product’s margin profile and increased plant production capacity, as fewer batches are needed to support the company’s revenue goals.
The ongoing post-marketing pediatric clinical study for Asceniv may provide label expansion opportunities, further strengthening its product portfolio.
Stay Invested in ADMA Stock
ADMA Biologics, which competes with Takeda TAK and Grifols GRFS in the market of plasma-derived products in the United States, is poised to perform well in the upcoming quarters as incremental additional penetration of Asceniv should accelerate near-term revenue growth.
The targeted market has significant potential. ADMA should continue to grow substantially in the underserved, immune-compromised and co-morbid patient population despite the availability of standard-of-care therapy.
Large biotech companies are generally considered safe havens for investors interested in this sector. Irrespective of how the company fares in the third quarter, ADMA makes for a good long-term investment. Hence, any dip may be used as a buying opportunity.
For investors already owning the stock, staying invested would be a prudent move.
You can see the complete list of today’s Zacks #1 Rank stocks here.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
