Is Adma Biologics (NASDAQ:ADMA) ready for a correction?


USD 2.69  0.01  0.37%   

As many millenniums are excited about healthcare space, it is only fair to go over Adma Biologics. We will analyze why it could be a much better year for Adma Biologics shareholders. What is the firm valuation so far in 2022? We are going to cover Adma Biologics perspective on valuation to give investors a better transparency on taking a position in it.
Published over six months ago
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The company currently holds 101.78 M in liabilities with Debt to Equity (D/E) ratio of 0.99, which is about average as compared to similar companies. Adma Biologics has a current ratio of 5.3, suggesting that it is liquid enough and is able to pay its financial obligations when due. Debt can assist Adma Biologics until it has trouble settling it off, either with new capital or with free cash flow. So, Adma Biologics' shareholders could walk away with nothing if the company can't fulfill its legal obligations to repay debt. However, a more frequent occurrence is when companies like Adma Biologics sell additional shares at bargain prices, diluting existing shareholders. Debt, in this case, can be an excellent and much better tool for Adma Biologics to invest in growth at high rates of return. When we think about Adma Biologics' use of debt, we should always consider it together with cash and equity.
On a scale of 0 to 100, Adma Biologics holds a performance score of 6. The firm shows a Beta (market volatility) of 0.6245, which signifies possible diversification benefits within a given portfolio. Let's try to break down what Adma Biologics's beta means in this case. As returns on the market increase, Adma Biologics returns are expected to increase less than the market. However, during the bear market, the loss on holding Adma Biologics will be expected to be smaller as well. Although it is vital to follow Adma Biologics historical returns, it is good to be conservative about what you can do with the information regarding equity current trending patterns. The philosophy towards foreseeing future performance of any stock is to evaluate the business as a whole together with its past performance, including all available fundamental and technical indicators. By analyzing Adma Biologics technical indicators, you can presently evaluate if the expected return of 0.38% will be sustainable into the future. Please makes use of Adma Biologics information ratio, treynor ratio, downside variance, as well as the relationship between the total risk alpha and value at risk to make a quick decision on whether Adma Biologics price patterns will revert.
We determine the current worth of Adma Biologics using both absolute as well as relative valuation methodologies to arrive at its intrinsic value. In general, an absolute valuation paradigm, as applied to this company, attempts to find the value of Adma Biologics based exclusively on its fundamental and basic technical indicators. By analyzing Adma Biologics's financials, quarterly and monthly indicators, and related drivers such as dividends, operating cash flow, and various types of growth rates, we attempt to find the most accurate representation of Adma Biologics's intrinsic value. In some cases, mostly for established, large-cap companies, we also incorporate more traditional valuation methods such as dividend discount, discounted cash flow, or asset-based models. As compared to an absolute model, our relative valuation model uses a comparative analysis of Adma Biologics. We calculate exposure to Adma Biologics's market risk, different technical and fundamental indicators, relevant financial multiples and ratios, and then comparing them to Adma Biologics's related companies.

Adma Biologics Investment Alerts

Adma Biologics investment alerts and warnings help investors to get more proficient at understanding not only critical technical and fundamental signals but also the significant portfolio-centered indicators. These indicators include beta, alpha, and other risk-related measures that will help you in monitoring Adma Biologics performance across your portfolios.Please check all investment alerts for Adma Biologics

Adma Biologics Valuation Ratios as Compared to Competition

Our valuation model uses many indicators to compare Adma Biologics value to that of its competitors to determine the firm's financial worth. You can analyze the relationship between different fundamental ratios across Adma Biologics competition to find correlations between indicators driving the intrinsic value of Adma Biologics.

How does Adma Biologics utilize its cash?

To perform a cash flow analysis of Adma Biologics, investors first need to understand how to read the cash flow statement. A cash flow statement shows the amount of cash Adma Biologics is receiving and how much cash it distributes out in a given period. The Adma Biologics cash flow statement breaks down these inflows and outflows into different buckets, including operating activities, investing activities, and financing activities.

Adma Biologics exotic insider transaction detected

Legal trades by Adma Biologics insiders are very common, as founders, directors, or employees of any publicly traded firm often have stock or stock options. These trades are made public in the United States through the filing of Form 4 of the Securities and Exchange Commission. Below entry was recorded recently and is publicly available as an insider trade:
Adma Biologics insider trading alert for general transaction of common stock by Adam Grossman, President and CEO, on 13th of May 2022. This event was filed by Adma Biologics Inc with SEC on 2022-05-13. Statement of changes in beneficial ownership - SEC Form 4 [view details]   
Note, although insider trading is legal, in the United States, Canada, Australia, and Germany, for mandatory reporting purposes, corporate insiders are defined as a company's officers, directors, and any beneficial owners of more than 10% of a class of the company's equity securities.

Breaking it down

The entity reported the previous year's revenue of 68.52 M. Net Loss for the year was (74.41 M) with loss before overhead, payroll, taxes, and interest of (11.57 M).

Margins Breakdown

Adma Biologics profit margins show the degree to which it makes money. Margin indicators are used not only by investors but also by creditors or Adma Biologics itself as indicators of financial health and management effectiveness. Please look more closely at the different varieties of Adma Biologics profit margins.
EBITDA Margin(1.76)
Gross Margin(0.42)
Profit Margin(2.23)

Adma Biologics Average Assets is somewhat stable at the moment. Further, Adma Biologics Average Equity is increasing over the last 8 years. Adma Biologics Average Assets is somewhat stable at the moment. Further, Adma Biologics Average Equity is somewhat stable at the moment.

Our take on today Adma Biologics rise

Current potential upside is at 6.82. Adma Biologics shows above-average downside volatility for the selected time horizon. We advise investors to inspect Adma Biologics further and ensure that all market timing and asset allocation strategies are consistent with the estimation of Adma Biologics future alpha. Understanding different market volatility trends often help investors to time the market. Properly using volatility indicators enable traders to measure Adma Biologics' stock risk against market volatility during both bullying and bearish trends. The higher level of volatility that comes with bear markets can directly impact Adma Biologics' stock price while adding stress to investors as they watch their shares' value plummet. This usually forces investors to rebalance their portfolios by buying different stocks as prices fall.

Adma Biologics Implied Volatility

Adma Biologics' implied volatility exposes the market's sentiment of Adma Biologics stock's possible movements over time. However, it does not forecast the overall direction of its price. In a nutshell, if Adma Biologics' implied volatility is high, the market thinks the stock has potential for high price swings in either direction. On the other hand, the low implied volatility suggests that Adma Biologics stock will not fluctuate a lot when Adma Biologics' options are near their expiration.

Our Final Take On Adma Biologics

Whereas other entities within the biotechnology industry are still a little expensive, even after the recent corrections, Adma Biologics may offer a potential longer-term growth to investors. Taking everything into account, as of the 24th of March 2022, our primary 90 days buy vs. sell advice on the company is Hold. We believe Adma Biologics is undervalued with very high chance of bankruptcy for the next two years.

Editorial Staff

This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Raphi Shpitalnik do not own shares of Adma Biologics. Please refer to our Terms of Use for any information regarding our disclosure principles.

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