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ZYBERNO

Stock Report

Updated Aug 31, 2026

ZAI LAB LIMITED (ZLAB)

Healthcare • NASDAQ

$26.08

Zai Lab Limited is a Chinese biopharmaceutical company headquartered in Shanghai, China, that discovers, develops, and commercializes therapeutic products for oncology, infectious diseases, autoimmune diseases, and neuroscience. The company in-licenses and develops innovative medicines from global pharmaceutical companies for the Greater China and Asia-Pacific markets, and also develops its own internally discovered molecules.

Professional Investment Analysis

ZYBERNO SCORE →

Is it a great business? Is it getting better?

35.0/100

WEAK BUSINESS

ZAI LAB LIMITED (ZLAB) scores 35/100 — weak fundamentals with mixed indicators requiring careful analysis before acting.

📊 How is the Zyberno Score calculated? +

The Zyberno Score answers one question: "Is this a quality business worth owning?" It's a 0-100 investment grade that evaluates business fundamentals across four critical dimensions, based on principles from Warren Buffett, Benjamin Graham, Peter Lynch, and Charlie Munger.

The 4 Core Categories (25 points each):

1. PROFITABILITY (25 pts)

Metrics: ROE, ROIC, Net Margin, Operating Margin
Thresholds: ROE >20% excellent • ROIC >20% excellent • Net Margin >20% excellent • Operating Margin >25% excellent

2. FINANCIAL STRENGTH (25 pts)

Metrics: Debt-to-Equity, Current Ratio, Interest Coverage, Altman Z-Score
Thresholds: D/E <0.3 excellent • Current Ratio >2.5 excellent • Interest Coverage >10x excellent • Altman Z >3.0 safe

3. CASH FLOW QUALITY (25 pts)

Metrics: Free Cash Flow, OCF vs Net Income, FCF Margin
Thresholds: Positive & growing FCF excellent • OCF/NI >1.2x excellent (cash earnings exceed accounting)

4. GROWTH & CONSISTENCY (25 pts)

Metrics: Revenue Growth, Net Income Growth, FCF Growth, Piotroski F-Score
Thresholds: Growth via log-linear regression • Piotroski 8-9 excellent, 6-7 good

Score Interpretation:

75-100

GREAT BUSINESS

65-74

GOOD BUSINESS

50-64

AVERAGE BUSINESS

30-49

WEAK BUSINESS

0-29

POOR BUSINESS

→ View full ZLAB quality analysis & detailed breakdown

VALUATION SIGNAL

N/A (Requires more data)

Requires fair value calculation and current price data

💰 How is Margin of Safety calculated? +

Margin of Safety measures how much discount or premium you're paying relative to a stock's intrinsic value. It's Benjamin Graham's core principle: the larger the margin, the lower your downside risk.

Formula: (Intrinsic Value − Current Price) ÷ Intrinsic Value × 100%

How We Calculate Intrinsic Value (DCF Method):

Step 1: Calculate current Owner Earnings (OCF − Maintenance CapEx)

Step 2: Calculate company-specific growth rate using log-linear regression on 16 quarters of Owner Earnings

Step 3: Project 10 years forward using the calculated growth rate

Step 4: Discount each year's cash flow to present value using 10% discount rate

Step 5: Calculate terminal value using 3% perpetual growth rate

Step 6: Sum all discounted cash flows = Intrinsic Value

What The Percentages Mean:

+50% or more

EXCELLENT — Very undervalued

+25% to +50%

GOOD — Attractive discount

0% to +25%

FAIR — Reasonable value

0% to -25%

CAUTION — Slight premium

-25% or worse

POOR — Overvalued

"Price is what you pay, value is what you get." — Warren Buffett

→ View full ZLAB valuation analysis · → View full ZLAB Brina Gap analysis

📈 How is Brina Gap calculated? +

Brina Gap measures the difference between the growth a business can fundamentally sustain and the growth the market is already pricing in.

Formula: Fundamental Growth Rate − Market-Implied Growth Rate

The Two Components:

Fundamental Growth Rate = ROIC × Reinvestment Rate

What the business can sustainably grow at based on how much it reinvests and what return it earns on that capital. Grounded in historical financials.

Market-Implied Growth Rate = Reverse DCF

The growth rate the current Enterprise Value implicitly assumes. Calculated by back-solving a 10-year DCF model (10% WACC, 3% terminal growth) until the present value of projected cash flows equals EV.

What The Gap Means:

Gap > +5% Market Underestimates — potential upside

+2% to +5% Slight Underestimate

-2% to +2% Fairly Priced — market consensus matches fundamentals

-5% to -2% Slight Overestimate

Gap < -5% Market Overestimates — price embeds optimism fundamentals don't support

A positive gap (market underestimates) combined with a positive Margin of Safety is the strongest combined signal — the business is both cheap historically and forward economics are stronger than the price suggests.

Critical Financial Health Indicators

Return on Equity (Profitability):CRITICAL (-27.4%)

Debt-to-Equity (Solvency Risk):EXCELLENT (0.04x)

Operating Margin (Operational Efficiency):CRITICAL (-58.7%)

Return on Capital (Capital Efficiency):CRITICAL (-79.5%)

📊 Valuation Trilogy

Three interconnected metrics for complete valuation analysis

Click any metric for full methodology and detailed analysis

Zyberno's Verdict

ZAI LAB LIMITED (ZLAB) stock report — Zyberno Score 35/100 (WEAK BUSINESS). Full financial analysis on Zyberno.

Over the trailing twelve months, ZLAB generated -$108.76M in Owner Earnings. Capital was deployed as follows: $7.76M invested in capital expenditures. Reinvestment rate: 3.5%.

DIVISION I: EXECUTIVE SUMMARY

A. Market Valuation

Market Price & Capitalization (2)

Current Price:26.08

Market Cap:$29.13B

Valuation Multiples (3)

P/B Ratio:47.99x

P/S Ratio:64.79x

Peg Ratio:-999.00x

Enterprise Metrics (1)

Enterprise Value:$28.77B

Price Action & Momentum (3)

12-1 Momentum:

-50.6% (10th pctile)

📈 Click to view full ZLAB Momentum analysis →

Momentum Percentile:10 / 100

% of 52-Week High:95.3%

B. Profitability Assessment

Return Metrics (5)

ROE:

-27.4%

📊 Click to view full ZLAB ROE analysis →

ROA:-16.7%

Roic:

-79.5%

📊 Click to view full ZLAB ROIC analysis →

Reinvestment Rate:3.5%

Fundamental Growth Rate (g):-2.8%

Margin Analysis (3)

Operating Margin Ttm:-58.7%

Net Margin Ttm:-41.9%

Ebitda Margin:-54.2%

TTM Performance (3)

Gross Margin Ttm:56.5%

Operating Margin Ttm:-58.7%

Net Margin Ttm:-41.9%

Yield Metrics (2)

Earnings Yield:-$0.69

Dividend Yield:0.0%

C. Log-Linear Regression Growth Trends

Earnings Surprise (SUE) (3)

Earnings Surprise (SUE):

-0.50

📊 Click to view full ZLAB Earnings Surprise analysis →

EPS Surprise vs Expected:-115.8%

Latest Earnings Filed:2026-08-06

Revenue Growth (Linear) (1)

Revenue Growth Rate (Linear):22.2%

D. Financial Stability

Liquidity Ratios (3)

Current Ratio:2.13x

Quick Ratio:1.92x

Cash Ratio:1.42x

Leverage Analysis (3)

Debt To Equity Ttm:0.04x

Debt-to-Equity Ratio:0.04x

Debt To Ebitda:-999.00x

Coverage Ratios (2)

Interest Coverage Ratio:-38.34x

Times Interest Earned:-38.34

Capital Structure (4)

Working Capital:485,453,000.00

Cash And Cash Equivalents:607,522,000.00

Long Term Debt:$11.45M

Net Debt:-$357.97M

DIVISION II: FINANCIAL STATEMENTS ANALYSIS

A. Income Statement Analysis

Revenue Components (2)

Revenue TTM: $449.61M

Linear Growth: 22.2%

📊 Click to view full ZLAB Revenue analysis & methodology →

Cost Of Revenue Ttm:$195.54M

Profitability Breakdown (2)

Gross profit TTM: $254.07M

Linear Growth: -4.5%

📊 Click to view full ZLAB Gross Profit analysis & methodology →

-$264.10M

Bottom Line Performance (3)

-$188.21M

Income Before Tax:-$190.72M

Ebitda Ttm:-243,802,000.00

Operating Expenses (5)

Operating Expenses:0.00

R And D Expense:236,918,000.00

Sga Expense:281,087,000.00

Income Tax Expense:-$2.51M

Interest Expense:5,984,000.00

Expense Ratios (3)

R And D To Revenue Percentage:222.9%

Sga To Revenue Percentage:264.4%

Ebitda Margin:-54.2%

B. Balance Sheet Analysis

Asset Composition (5)

Total Assets:$1.07B

Current Assets:$914.04M

Ppe Net:46,431,000.00

Goodwill:0.00

Intangible Assets:$85.77M

Liability Structure (4)

Total Liabilities:467,756,000.00

Current Liabilities:428,584,000.00

Long Term Debt:$11.45M

Short Term Debt:$238.10M

Equity & Capital (3)

Equity:$607.04M

Retained Earnings:-$2.73B

Common Stock:5,000,000,000.00

Working Capital Items (3)

Accounts Receivable:69,595,000.00

Inventory:90,890,000.00

Accounts Payable:136,692,000.00

Special Items (2)

Contract Liabilities:0.00

Stock Based Compensation:12,126,000.00

C. Cash Flow Analysis

Operating Activities (2)

-$101.00M-$108.76M

Investment Activities (2)

Investing Cash Flow:-$22.29M

Capital Expenditures Ttm:7,762,000.00

Financing Activities (3)

Financing Cash Flow:$5.57M

Dividends Paid Ttm:0.00

Stock Repurchase:0.00

Capital Transactions (3)

Common Stock Issuance:0.00

Long Term Debt Issuance:$0.00

Long Term Debt Repayments:$0.00

Non-Cash Items (1)

Depreciation Amortization Ttm:20,300,000.00

DIVISION III: OPERATIONAL METRICS

A. Per Share Analysis

Earnings Per Share (3)

EPS (Basic TTM):-0.18

-$0.18

Earnings Per Share Ttm:-$0.17

Revenue & Cash Per Share (2)

Sales Per Share Ttm:0.40

Operating Cash Flow Per Share:-$0.13

Book Value & Capital (2)

Book Value Per Share:$0.54

Cash Per Share:0.54

Dividend Policy (1)

Dividend Payout Ratio:-999.00x

B. Operational Efficiency

Asset Utilization (2)

Asset Turnover Ttm:0.40x

Working Capital Turnover Ttm:0.93x

Receivables Management (2)

Receivables Turnover Ttm:6.46x

Days Sales Outstanding Ttm:56.50

Inventory Management (2)

Inventory Turnover Ttm:2.15x

Days Inventory Outstanding Ttm:169.66

Payables & Cash Cycle (2)

Days Payable Outstanding:255.15

Cash Conversion Cycle:-29.00

C. Quality & Risk Metrics

Financial Quality Scores (2)

Financial Strength Score:100.00

Quality Score:40.00

Market Metrics (2)

Beta:0.00x

Volatility Category:unknown

DIVISION IV: INVESTMENT ANALYSIS

A. Value Investment Framework

Owner Earnings Analysis (1)

-$108.76M

Damodaran Growth Analysis (2)

Reinvestment Rate:3.5%

Fundamental Growth Rate (g):-2.8%

B. Log-Linear Regression Growth Analysis

Growth Rates (Log-Linear Regression) (1)

Revenue Growth Rate (Linear):22.2%

Other Growth Rates (2)

Gross Profit Growth Rate (Linear):-4.5%

Book Value Growth Rate (Linear):-13.7%

C. Company Profile & Context

Corporate Information (6)

Symbol:ZLAB

Company Name:ZAI LAB LIMITED

Sector:Healthcare

Industry:Pharmaceuticals

Exchange:NASDAQ

Country:United States

Market Classification (3)

Market Cap Category:N/A

Price Category:medium

Volume Category:N/A

Share Structure (3)

Shares Outstanding:1.12B

Shares Outstanding Basic:1.12B

Shares Outstanding Diluted:1.12B

Data Processing Info (3)

Processing Version:v3.0

Last Updated:2026-08-31 09:08:52 UTC

Data Timestamp:2026-08-31T09:08:52.697395