Event context and recent share performance

ADMA Biologics (ADMA) has come onto many investors’ radar after a 3.2% gain over the past day, contrasting with a 7% decline over the past month and a 10% drop year to date.

The recent 1 day share price return of 3.21% comes against a weaker year to date share price return of 10.01% and a modest 1 year total shareholder return of 1.2%. This suggests that shorter term momentum is trying to pick up after a softer patch within a very large 3 year total shareholder return.

If ADMA Biologics has you thinking about where else growth stories might emerge in healthcare, it could be worth scanning our screener of 25 healthcare AI stocks as a starting list of ideas.

With ADMA Biologics trading at $16.09 alongside value metrics that suggest a possible discount to some estimates of worth, you have to ask: is this an underappreciated growth story, or is the market already pricing in what comes next?

Most Popular Narrative: 23.1% Undervalued

ADMA Biologics last closed at $16.09, while the most followed narrative on the stock, according to pizzitaxi, points to a fair value of $20.93 based on a discounted cash flow approach using a 7% discount rate.

ADMA will be highly profitable due to high ratio of hyperimmunes (maybe eventually they will only manufacture hyperimmunes if S. pneumonia is successful and provided they can source the required amount of hyperimmune plasma). CSL (its large peer) has 11% FCF and 17% net profit margin but most of the revenue is not generated from high margin hyperimmunes and a lot of revenue not even from IgG.

Curious how this narrative gets to a higher fair value than today’s price? It relies on assumptions of rising margins, faster revenue expansion, and a future earnings multiple that reflects a scenario in which ADMA becomes a higher quality cash generator. The exact growth path and profitability ramp are described in the full write up.

Result: Fair Value of $20.93 (UNDERVALUED)

However, this depends on ADMA reaching the assumed revenue scale and margins, and any setback in hyperimmune plasma sourcing or S. pneumonia progress could challenge that path.

Build Your Own ADMA Biologics Narrative

If you see the numbers differently or simply prefer to rely on your own homework, you can build a personalized view in just a few minutes: Do it your way.

A great starting point for your ADMA Biologics research is our analysis highlighting 4 key rewards and 1 important warning sign that could impact your investment decision.

Looking for more investment ideas?

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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.