Zai Lab (NasdaqGM:ZLAB) just closed FY 2025 with Q4 revenue of US$127.6 million and a basic EPS loss of US$0.46, while trailing 12 month revenue came in at US$460.2 million and EPS at a loss of US$1.60. The company has seen revenue move from US$398.99 million and a basic EPS loss of US$2.60 on a trailing basis in Q4 2024 to US$460.16 million and a basic EPS loss of US$1.60 in Q4 2025, outlining a picture in which revenue scale is building even as margins remain in loss-making territory.

See our full analysis for Zai Lab.

With the latest earnings on the table, the next step is to line these figures up against the prevailing narratives to see which views on Zai Lab hold up and which ones the numbers start to challenge.

TTM loss of US$175.5 million alongside improving quarterly EPS

• On a trailing 12 month basis, Zai Lab reported a net loss of US$175.5 million and a basic EPS loss of US$1.60, while quarterly EPS moved within a relatively tight range in FY 2025 from a loss of US$0.45 in Q1 to a loss of US$0.33 in Q3 and a loss of US$0.46 in Q4.
• Supporters of the bullish view argue that this earnings profile can move toward positive territory as the pipeline scales, yet the latest figures still show losses each quarter, which means:
  • The five year trend of losses narrowing at about 19% a year is not yet visible as profitability in the FY 2025 numbers, with all reported net income lines still in the red.
  • Forecasts in the supplied data indicate Zai Lab is not expected to be profitable in the next three years, so any bullish case depends on earnings turning around beyond that horizon rather than on current EPS.

Over US$460 million of trailing revenue and ongoing losses make this a classic growth versus profitability debate for bulls weighing the pipeline against the current income statement. 🐂 Zai Lab Bull Case

Revenue near US$460 million against continued three year loss outlook

• Trailing 12 month revenue reached US$460.2 million, up from US$399.0 million at the FY 2024 Q4 mark, while trailing net losses narrowed from US$257.1 million to US$175.5 million over the same points in time.
• Critics in the bearish narrative point out that even with this revenue base, the company is still guided as loss making over at least the next three years, which is reflected in the data as:
  • Consensus expectations that profit margins remain negative over that period, with no forecast for sustained net income despite the trailing five year improvement in losses.
  • Ongoing R&D and commercialization spend implied in the analysis as necessary to support the pipeline, which can keep net income under pressure even when revenue is moving higher.

Skeptics looking at nearly half a billion dollars of trailing revenue but no near term profitability target will focus heavily on how long losses at this scale are sustainable. 🐻 Zai Lab Bear Case

Share price at US$19.77 versus DCF fair value of US$80.05

• The stock trades at US$19.77 with a P/S of 4.8x, compared with peer and US Biotechs industry averages of 7.2x and 10.9x respectively, while the provided DCF fair value figure stands at US$80.05.
• Consensus narrative supporters view this valuation gap as a potential reward, but the figures also show some tension in the story:
  • The single analyst target allowed here is US$34.91, which is below the DCF fair value and above the current share price, so the model based upside implied by US$80.05 is larger than the analyst target embedded in the data.
  • At the same time, forecasts suggest Zai Lab is expected to remain unprofitable over the next three years, so both the lower P/S multiple and the DCF fair value need to be weighed against the absence of a near term profit timeline.

Next Steps

To see how these results tie into long-term growth, risks, and valuation, check out the full range of community narratives for Zai Lab on Simply Wall St. Add the company to your watchlist or portfolio so you'll be alerted when the story evolves.

If this mixed picture of risks and rewards leaves you undecided, review the underlying data now and form your own view with the full breakdown of 3 key rewards and 1 important warning sign

See What Else Is Out There

Zai Lab is still reporting annual losses of US$175.5 million with no forecast for profitability over the next three years, despite its revenue base.

If you are uneasy about ongoing losses and want companies where earnings and balance sheets already look sturdier, check out the 72 resilient stocks with low risk scores for a shortlist of ideas that better match that profile.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.