One-glance verdict
Undervalued
$16.01 our estimate vs market $10.89
Wall Street consensus: $17.12 (7.0% higher than our fair-value estimate)
32% below our estimate, below the bear case
Fundamentals snapshot
AbCellera Biologics Inc.
ABCL · NMS · Healthcare · Biotechnology
Current price
$10.89
52-week range
$2.75 - $12.58
Market cap
$3.53B
Balance sheet
Healthy
-50.24x Concerning
Net cash $404.49M. Interest coverage shows how many times profit covers the interest bill.
What stands out
1 Reward
2 Risks
1 rewards · 2 risks
- Reward Free cash flow was positive in 3/10 years.
- Risk Operating margin compressed from 46.8% to -1550.0% over 3 years.
- Risk Return on equity was -17.3% last year — the company lost money on shareholders' equity.
What this company does
AbCellera Biologics Inc.
AbCellera Biologics uses its technology to help discover new medicines based on antibodies, the proteins our bodies naturally make to fight disease. The company mainly earns money by partnering with large drugmakers like Eli Lilly, receiving fees for its work and a potential share of any future drug sales (called royalties). This is important because their technology platform aims to speed up the creation of treatments for illnesses that don't yet have effective solutions.
How the company got here
Founded in 2012 as a spin-off from the University of British Columbia, AbCellera developed a high-tech platform to find antibodies for new medicines much faster than traditional methods. The company gained significant attention for its role in a government program aimed at rapidly responding to pandemics. This technology proved critical during the COVID-19 pandemic when AbCellera, in partnership with Eli Lilly, developed an antibody treatment in a record time of about 90 days. The success of this treatment brought in substantial revenue and validated the company's discovery platform.
What it actually does
AbCellera acts like a high-tech search engine for the human immune system. It uses a sophisticated platform that combines artificial intelligence, robotics, and data science to screen millions of immune cells and find the specific antibodies that can fight a particular disease. Think of it as finding the one perfect key (the antibody) that can unlock and neutralize a specific threat (like a virus or cancer cell) in the body. Other pharmaceutical companies then partner with AbCellera to turn these discovered antibodies into new medicines.
Partnership and Royalty Revenue
The main way AbCellera makes money is by partnering with other drug companies, from small biotechs to large pharmaceutical giants. These partners pay AbCellera for using its technology to discover promising antibodies for diseases they want to treat. This business line includes upfront fees for starting a project, payments for hitting specific research and development goals (milestone payments), and a small percentage of future sales if a drug is successful (royalties). For example, its collaboration on COVID-19 antibodies with Eli Lilly generated significant royalty revenue.
Internal Drug Development
More recently, AbCellera has started to use its own technology to develop its own medicines instead of just discovering them for partners. This means the company is now advancing its own potential drugs through the long and expensive process of clinical trials (testing in humans to ensure safety and effectiveness). While this part of the business doesn't generate significant revenue yet, a successful drug could be very valuable in the future. The company currently has its own drug candidates in clinical trials for conditions like menopause-related hot flashes and autoimmune disorders.
What management is betting on now
Management is now focused on shifting from primarily a service company for partners to a clinical-stage biotechnology company that develops its own drugs. They are investing heavily in research and development (R&D) to advance their own pipeline of potential medicines, with the goal of bringing two new molecules into clinical trials each year. The company is also building out its capabilities to handle the entire process from discovering an antibody to manufacturing it for clinical trials. This strategy aims to capture more of the long-term value from a successful drug rather than just receiving royalties from partners.
Price history
How the share price has moved
—
Loading price history…
Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2024 Q3
$-47.40M
FY2024 Q4
$-23.63M
FY2025 Q1
$-22.19M
FY2025 Q2
$-45.77M
FY2025 Q3
$-61.52M
FY2025 Q4
$-44.59M
FY2026 Q1
$-37.35M
FY2026 Q2
$23.79M
Revenue
$4.05M
Net income
$-55.43M
Diluted EPS
-0.18
Operating cash flow
$25.92M
Free cash flow
$23.79M
Fetching…
Sources
Revenue
$8.31M
Net income
$-43.16M
Diluted EPS
-0.14
Operating cash flow
$-33.52M
Free cash flow
$-37.35M
Fetching…
Sources
Revenue
$44.85M
Net income
$-8.95M
Diluted EPS
-0.03
Operating cash flow
$-34.74M
Free cash flow
$-44.59M
Fetching…
Sources
Revenue
$8.96M
Net income
$-57.12M
Diluted EPS
-0.19
Operating cash flow
$-52.59M
Free cash flow
$-61.52M
Fetching…
Sources
Revenue
$17.08M
Net income
$-34.73M
Diluted EPS
-0.12
Operating cash flow
$-32.40M
Free cash flow
$-45.77M
Fetching…
Sources
Revenue
$4.24M
Net income
$-45.62M
Diluted EPS
-0.15
Operating cash flow
$-11.55M
Free cash flow
$-22.19M
Fetching…
Sources
Revenue
$5.05M
Net income
$-34.21M
Diluted EPS
-0.11
Operating cash flow
$-8.00M
Free cash flow
$-23.63M
Fetching…
Sources
Revenue
$6.51M
Net income
$-51.11M
Diluted EPS
-0.17
Operating cash flow
$-28.88M
Free cash flow
$-47.40M
Fetching…
Sources
Is it cheap or expensive?
Fair value $16.01 vs current price $10.89
Wall Street consensus is the average analyst price target: $17.12 (7.0% higher than our fair-value estimate).
Our most-likely fair value is $16.01 a share — about 47.0% above today's price of $10.89, so the stock currently looks cheap (undervalued).
Is it drowning in debt?
Healthy
Net cash $404.5M - more cash than debt. Interest coverage -50.2x.
Net debt
$-404.49M
Interest coverage
-50.24x
AbCellera Biologics Inc.'s profit covers its interest bill about 0.0 times over. which is weaker than most peers shown here and 3 peers sit below 1x, which is the danger zone where profit does not fully cover the interest bill.
Healthy
Worse cushion
Baseline
Better cushion
ABCL
BASELINE
AbCellera Biologics Inc.
Total debt $135.62M Interest coverage -50.24x This is the baseline the peer rows are being compared against.
Total debt $108.00M Interest coverage -157.90x Neither company has much profit cushion over interest right now.
Total debt $66.64M Interest coverage -358.08x Neither company has much profit cushion over interest right now.
Total debt $108.59M Interest coverage -4,698.59x Neither company has much profit cushion over interest right now.
Total debt $301.94M Interest coverage 1.06x This peer still has a real interest-payment cushion, while ABCL does not.
What you should know
The case for and against ABCL
1 Reward
2 Risks
Rewards
-
Free cash flow was positive in 3/10 years.
Risks
-
Operating margin compressed from 46.8% to -1550.0% over 3 years.
-
Return on equity was -17.3% last year — the company lost money on shareholders' equity.
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
—
Forward P/E
-15.23x
P/B
3.72x
P/S
53.33x
EV/EBITDA
-14.68x
PEG ratio
—
Profitability
How much profit each dollar creates
Gross margin
-198.9%
Operating margin
-1,550.0%
Net margin
-248.8%
ROE
-17.3%
ROA
-10.4%
Health
Liquidity and balance-sheet strength
Debt / equity
0.15x
Current ratio
12.77x
Quick ratio
11.23x
Total debt
$135.62M
Total cash
$540.10M
Growth
How the business has been compounding
Revenue TTM
$66.17M
Revenue 5Y CAGR
-33.1%
EPS TTM
-0.54
EPS 5Y CAGR
—
Cash flow
How much cash the business throws off
Operating CF TTM
$-94.94M
Free CF TTM
$-174.07M
FCF margin
-263.0%
Dividend
Shareholder payout
Yield
—
Payout ratio
0.0%
Last ex-div date
—