TLDR:
- ADMA Biologics stock crashed 16.3% after auditor CohnReznick unexpectedly resigned
- Company reiterated 2024-2025 sales guidance of $400-445 million
- ADMA makes immunoglobulin products for compromised immune systems
- Stock had risen 350% year-to-date before the crash
- ADMA currently has a Zacks Rank of #1 (Strong Buy)
ADMA Biologics, a leading producer of immunoglobulin products, experienced a stock price drop on Thursday following the unexpected resignation of its auditor.
The company’s shares plummeted 16.3%, closing at $17.01, after it announced that CohnReznick LLP, its independent registered public accounting firm, would step down after filing the report for the quarter ended September 30.
The news came as a shock to investors, as ADMA Biologics had been performing exceptionally well in the market. Prior to the announcement, the stock had seen a remarkable 350% increase since the beginning of the year, rising from under $5 to over $20 per share. ADMA Biologics held the top position in the IBD 50 list and boasted perfect IBD Composite and Relative Strength ratings.
Despite the auditor’s resignation, ADMA Biologics sought to reassure investors by reaffirming its financial guidance for 2024 and 2025.
The company stated that it still expects sales to reach $400 million in 2024 and $445 million in 2025, indicating confidence in its ongoing operations and growth prospects.
ADMA Biologics specializes in developing and manufacturing plasma-derived products for individuals with compromised immune systems. Its flagship product, Asceniv, is created using plasma donated by people with naturally higher levels of antibodies effective against respiratory syncytial virus (RSV).
The company also produces Bivigam, an infusion containing a range of antibodies found in healthy immune systems, and Nabi-HB, which provides protection against hepatitis B for exposed individuals.
The immunoglobulin market, particularly for primary immunodeficiency patients, represents a significant opportunity for ADMA Biologics.
These patients require regular infusions of products like Asceniv to maintain their immune function. The company’s focus on this niche has contributed to its strong performance and positive outlook.
In its most recent trading session prior to the auditor news, ADMA Biologics stock had shown a slight dip of 1.91%, closing at $20.33. This minor decrease came against the backdrop of gains in the broader market, with the S&P 500 rising 0.71% and the Dow adding 1.03% on the same day.
Looking ahead, analysts are optimistic about ADMA Biologics’ near-term financial performance. The company is expected to post earnings per share (EPS) of $0.13 in its upcoming report, representing a substantial 1200% growth compared to the same quarter last year.
Revenue projections are also strong, with expectations of $107.25 million for the quarter, marking a 59.41% increase year-over-year.
The positive outlook is reflected in ADMA Biologics’ current Zacks Rank of #1 (Strong Buy). This ranking system, which considers recent analyst revisions, suggests that the stock may outperform the market in the coming months.
The company’s forward price-to-earnings (P/E) ratio stands at 42.29, indicating a premium valuation compared to the industry average of 22.53.
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