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Ambrx (AMAM) Stock Analysis

Author: Christopher Wiesler


Ambrx operates in the Healthcare sector in the Biotechnology industry. Ambrx Biopharma is a clinical-stage biologics company. It discovers and develops engineered precision biologics using its proprietary expanded genetic code technology platform. Ambrx was founded in 2003 and IPO’d in June 2021. The company stock has grown consistently by 910.71% in the past year.



Ambrx Market Cap is $734.20 and the Enterprise is valued at $510.13M. The trailing price to earnings ratio was 1.38, which is very good as it means that when buying the stock, the buyer is paying less money for the dividends you receive. In the past 12 months, the company generated $5.64M in revenue.


Ambrx price to book ratio is 2.93, which is an indication that the company stock is overvalued and that it might drop in the future. Ambrx’ operating margin is -940.86%, which is another indicator that the company stock is overvalued and that it might drop in the future. The company’s ROA is -14.39% and its ROE is -30.40%, which are both strong indicators that the company is losing money and this indicates that the share price of the company may drop in the future. Ambryx’ operating cash flow in the past 12 months is -$54.6M, showing that the company is losing money.


The discouraging values above need to be put into perspective. Ambrx discovers and develops biologic products and therefore has to spend lots of money on research to discover new things and develop new products. Therefore, it’s expected that the company has high costs of production for new units as they have to spend high amounts on research to develop new products.


Analysts on Yahoo Finance predict that the company stock will grow 74.9% this year, showing that it would be a good short-term investment. The analysts also predict that the company stock will grow 2% in the next year. This means that an investor wouldn’t generate much profit if they sell the stock then and therefore it may not be the best medium-term investment. Over the next 5 years, analysts predict that the share price will grow by 21.70% per annum, showing that the stock would also be a good long-term investment.



The company will continue to spend on research and then discover and develop new products to expand its business and generate further profits. As the company is still very small and continuing to grow, its expected that, due to high research costs, the business wouldn’t be generating profits at this stage. The growth of its stock also represents the change in market conditions to more technology use, as the company uses a technology platform in its operations.



Key takeaways:

  • Expected to grow 21.7% per annum for the next 5 years

  • Expected to grow 74.9% this year

  • The company is spending high amounts on research and therefore has a negative operating margin

  • Analysts say that the stock is a good buy and ranked it between strong and very strong buy



Sources:


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