Q: Greetings 5i, may we please have an updated analysis and your opinion on AbCellera and its future prospects? What are the major positives and major risks? Thank you.
5i Research Answer:
ABCL has been flat since mid-2024 and its topline growth has been good, but it is highly unprofitable and generates negative free cash flows. It has a decent balance sheet, with a very strong cash position of $534M (on a $1.1B market cap), but the company is burning through this cash each year, and while it trades at a decent valuation and it does have a good breadth in its partnered pipeline, we do not like the negative momentum and we would prefer to wait on the sidelines until its price starts to move higher, or earnings estimates trend materially higher.