ADMA stock has just received a consensus rating of “Buy” from nine brokerages covering the stock. With all in agreement, why are analysts bullish on this biotechnology stock?
Let’s find out!
AMDA Stock
Selling for $4.53 at present on the NASDAQ exchange, ADMA Biologics Inc (NASDAQ:ADMA) has had a tough time crossing the $5 mark. The volatile month shows increasing trading volume, yet investors seem unsure—sudden gains are correcting almost on the daily. But a surge to $5 and above could be on the horizon, as according to Marketbeat, the stock has an average price target of $11.42 set by nine analysts who have been closely watching ADMA stock over the last year.
Why “Buy”?
ADMA is a biotechnology company aiming to find a way to “mend” or enhance non-existent immune systems. It’s no easy task.
Its flagship treatment, called RI-002, is currently in phase 3, awaiting FDA approval. Getting to this stage has been a struggle, however, and ADMA stock bares the scars. According to Sickeconomics, the treatment has suffered “an epic series of setbacks and frustrations on its way to commercialization.”
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Why would this be? One reason is that RI-002 is a liquid derived from human blood plasma and, as such, is hard to find, make, and store.
The company’s original contract manufacturer failed to pass government inspection, and this hindered the entire operation. But as of October 2018, ADMA has secured the necessary funding and management expertise to handle this part of the process itself. Its Florida manufacturing facility has passed government inspection and is on the verge of producing RI-002 as soon as it is approved.
This very fact is most likely why analysts are shouting buy.
ADMA Stock: Turning Around
If/when approval is granted, the company will receive megabucks to produce its flagship treatment. Effectively, ADMA will turn from a biotechnology company that is burning cash to try and do something, into a “cash positive, vertically integrated manufacturer of a hard to make, in demand, medicine.”
That position is the holy grail for biotechnology investors. ADMA stock price is low now but could soar once approval is granted and demand comes knocking at the door.
What do you think? Are you a biotech stock investor?
Featured Image: DepositPhotos © JanPietruszka
