Value
8.9/10data confidence 83%| Component | Sub-score |
|---|---|
| P/E | 8.4 |
| P/S | 7.5 |
| Fwd P/E | 9.4 |
| PEG | 10.0 |
| Analyst target | 9.0 |
- ▸Forward P/E: 9.0x
- ▸PEG: 0.19
- ▸Attractively valued
ADMA · Why this verdict
Why ADMA Biologics (ADMA) is rated BUY WAIT
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictBUY WAIT
Overall score6.6/10
ConfidenceMEDIUM
MacroNEUTRAL
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
At a forward price-to-earnings ratio of 8.5x and a PEG of 0.18, the market is pricing the company's earnings well below its growth rate; analyst consensus implies approximately 107% upside from the current price, reflecting a wide gap between current price and intrinsic value estimates. Valuation breakdown | The forward price-to-earnings ratio expands toward 15x over 12 months as earnings growth is sustained and the market narrows the valuation gap, with the stock price appreciating materially toward analyst targets. | →Stable |
| CounterA low forward multiple in a small-cap biotechnology company can persist indefinitely if the market demands a higher risk premium for clinical, regulatory, or revenue-concentration uncertainty not fully captured in the earnings line. | ||
A return on equity of 43%, margins of 32%, and wide economic moat characteristics place the company in the top tier of its peer group on both return metrics and P/E relative to peers, indicating a franchise that compounds returns at an above-average rate. Peer rank | Return on equity stays above 25% and gross margins remain above 25% over the next four quarters, preserving the peer-relative quality advantage. | →Stable |
| CounterHigh returns on equity in a leveraged structure can be flattered by balance sheet leverage rather than operational excellence; if debt costs rise or revenue moderates, the return profile could compress faster than the margin trend implies. | ||
Free cash flow represents only 35% of net income — a level flagged as a red flag — indicating that reported earnings are significantly overstating the cash actually available to the business, which limits the quality of the earnings stream despite strong headline profitability. Quality breakdown | Free cash flow conversion rises above 80% of net income for 2 consecutive quarters, signaling that the gap between reported earnings and cash generation has narrowed to a sustainable level. | →Stable |
| CounterBelow-100% cash conversion in a growth-stage healthcare company may reflect deliberate investment in working capital and infrastructure to support revenue expansion, which could normalize as growth matures rather than signaling an accounting concern. | ||
The stock is below its long-term moving average with a confirmed downtrend — the long-term average has crossed below shorter-term levels with a slope of -8.7% over 30 days — but near-term momentum is improving, with MACD turning constructive, RSI at 58, and volume accumulation (rising on-balance volume) all suggesting the initial conditions for a recovery. Momentum breakdown | Price recovers above the 200-day moving average and on-balance volume continues to rise for 8 consecutive weeks, confirming the transition from downtrend to recovery is intact. | →Stable |
| CounterA downtrend with a falling long-term moving average slope of -8.7% over 30 days is a persistent signal; near-term improvement in MACD and volume can be false starts, and the confirmed downtrend could resume if the underlying catalyst for recovery does not materialize. | ||
Five news-related risks have been flagged, and the most recent reported quarter missed consensus by approximately 15%, introducing caution about near-term execution and signaling that the current environment warrants waiting for additional clarity before committing capital. Warnings | The flagged news risks resolve without material adverse impact AND EPS beats consensus by more than 5% for 2 consecutive quarters, confirming the cautionary signals were transient rather than structural. | →Stable |
| CounterA single earnings miss preceded by a beat and two in-line quarters does not establish a downward trend; if the miss reflected a timing issue rather than a demand problem, the next quarter's results may demonstrate the concern was overstated. | ||
At a forward price-to-earnings ratio of 8.5x and a PEG of 0.18, the market is pricing the company's earnings well below its growth rate; analyst consensus implies approximately 107% upside from the current price, reflecting a wide gap between current price and intrinsic value estimates.
→StableValuation breakdown
- Expectation
- The forward price-to-earnings ratio expands toward 15x over 12 months as earnings growth is sustained and the market narrows the valuation gap, with the stock price appreciating materially toward analyst targets.
CounterA low forward multiple in a small-cap biotechnology company can persist indefinitely if the market demands a higher risk premium for clinical, regulatory, or revenue-concentration uncertainty not fully captured in the earnings line.
A return on equity of 43%, margins of 32%, and wide economic moat characteristics place the company in the top tier of its peer group on both return metrics and P/E relative to peers, indicating a franchise that compounds returns at an above-average rate.
→StablePeer rank
- Expectation
- Return on equity stays above 25% and gross margins remain above 25% over the next four quarters, preserving the peer-relative quality advantage.
CounterHigh returns on equity in a leveraged structure can be flattered by balance sheet leverage rather than operational excellence; if debt costs rise or revenue moderates, the return profile could compress faster than the margin trend implies.
Free cash flow represents only 35% of net income — a level flagged as a red flag — indicating that reported earnings are significantly overstating the cash actually available to the business, which limits the quality of the earnings stream despite strong headline profitability.
→StableQuality breakdown
- Expectation
- Free cash flow conversion rises above 80% of net income for 2 consecutive quarters, signaling that the gap between reported earnings and cash generation has narrowed to a sustainable level.
CounterBelow-100% cash conversion in a growth-stage healthcare company may reflect deliberate investment in working capital and infrastructure to support revenue expansion, which could normalize as growth matures rather than signaling an accounting concern.
The stock is below its long-term moving average with a confirmed downtrend — the long-term average has crossed below shorter-term levels with a slope of -8.7% over 30 days — but near-term momentum is improving, with MACD turning constructive, RSI at 58, and volume accumulation (rising on-balance volume) all suggesting the initial conditions for a recovery.
→StableMomentum breakdown
- Expectation
- Price recovers above the 200-day moving average and on-balance volume continues to rise for 8 consecutive weeks, confirming the transition from downtrend to recovery is intact.
CounterA downtrend with a falling long-term moving average slope of -8.7% over 30 days is a persistent signal; near-term improvement in MACD and volume can be false starts, and the confirmed downtrend could resume if the underlying catalyst for recovery does not materialize.
Five news-related risks have been flagged, and the most recent reported quarter missed consensus by approximately 15%, introducing caution about near-term execution and signaling that the current environment warrants waiting for additional clarity before committing capital.
→StableWarnings
- Expectation
- The flagged news risks resolve without material adverse impact AND EPS beats consensus by more than 5% for 2 consecutive quarters, confirming the cautionary signals were transient rather than structural.
CounterA single earnings miss preceded by a beat and two in-line quarters does not establish a downward trend; if the miss reflected a timing issue rather than a demand problem, the next quarter's results may demonstrate the concern was overstated.
TrendMatrix Research · core thesis
Engine thesis — one sentence
ADMA Biologics screens at a forward price-to-earnings ratio of 8.5x and PEG of 0.18, with a return on equity of 43%, wide moat characteristics, and analyst consensus implying roughly 107% upside; the primary cautions are a free cash flow conversion of only 35% of net income and a confirmed long-term trend breakdown — though improving near-term momentum indicators suggest a recovery setup may be forming.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Per-dimension breakdown
Quality
7.8/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 10.0 |
| ROA | 10.0 |
| Gross margin | 8.3 |
| Net margin | 10.0 |
| Current ratio | 6.0 |
| FCF quality | 2.8 |
| Moat | 7.5 |
| Piotroski F | 7.8 |
- ▸Excellent ROE: 43%
- ▸Strong margins: 32%
- ▸Earnings quality RED FLAG: 35% FCF/NI
- ▸Wide economic moat
Growth
8.2/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 6.5 |
| EPS growth | 10.0 |
Momentum
6.4/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 3.5 |
| MACD | 8.2 |
| OBV | 10.0 |
| MA position | 6.0 |
| Volume | 4.3 |
- ▸Volume accumulation (rising OBV)
- ▸Below 200-MA, MA slope -8.6%/30d — confirmed downtrend
Sentiment
6.6/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 5.0 |
| Price target | 10.0 |
| erm sentiment | 5.0 |
- ▸Analyst upside: 97%
Insider
5.3/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.5 |
| holder change | 5.1 |
- ▸Insider buying (low materiality) — $250,874 (0.012% of mkt cap)
Peer rank
5.4/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 7.6 |
| quality rank | 8.4 |
| growth rank | 5.4 |
- ▸Superior ROE vs peers
Technical
1.5/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 0.3 |
| support resistance | 0.7 |
| 52w position | 0.0 |
| gap | 5.0 |
Risk (lower is worse)
4.6/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 4.4 |
| days to cover | 4.0 |
| volatility | 2.9 |
| put call | 7.8 |
| implied vol | 0.0 |
| beta | 8.6 |
| debt equity | 4.8 |
- ▸High IV: 102%
Catalyst
4.0/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 3.3 |
| earnings timing | 5.0 |
| surprise avg | 2.8 |
How the verdict was assembled
Engine trigger
Growth is outpacing valuation and the technical setup has confirmed a breakout above resistance (PEG 0.19, quality 7.8/10, growth 8.2/10). (held at prior verdict — engine reading is near the momentum/RSI threshold; will commit on clearer signal).
Engine technical detail
verdict_path:
L4:PATH_C2_GARP|STABILIZER:PROMOTE_DEAD_ZONE|ENTRY_STICKY:PRIOR_STILL_VIABLEPassed (10)
- MOMENTUM:6.4>=5.5
- ASYMMETRY:5.7>=1.5
- INSIDER:OK
- DEATH_CROSS:QUALITY_MOMENTUM_EXEMPT
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:33d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
- SECTOR_CONCENTRATION_CAP:sector=Healthcare:2/10
Failed (0)
none
Warning (1)
- DEATH_CROSS:quality=7.8>=7.5+momentum=6.4>=5.0 exempted
Reward-to-Risk
5.68
Upside
+71.1%
Downside
12.5%
Sizing output
HALF
SetupRecovery — Death cross but MACD improving, RSI 65
EdgeNo clear edge — No clear edge identified
SuitabilitySpeculative — Drawdown -60% (>40% off 52w high), Binary industry: Biotechnology
Investment implication
The C-path quality+growth combination triggered the STRONG_BUY_WAIT verdict: quality 7.8 and growth 8.3 both clear their thresholds, with asymmetric R:R of 5.68 supporting the read.
The strongest dimensions are Value at 8.9, Growth at 8.2, and Quality at 7.8; the weakest are Technical at 1.5, Catalyst at 4.0, and Risk (lower is worse) at 4.6. The V9 engine cleared all gates with 1 warning, producing an asymmetric reward-to-risk of 5.68 and an engine sizing output of HALF.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Deep Valuation Discount
Trip ifForward P/E rises above 20x, indicating the deep valuation discount has been fully re-rated and the original entry thesis is consumed.
- P2Superior Returns Versus Peers
Trip ifReturn on equity falls below 20% for 2 consecutive quarters, indicating the return advantage versus peers has narrowed materially from the current 43%.
- P3Fcf Conversion Shortfall
Trip ifFree cash flow conversion rises above 80% of net income for 2 consecutive quarters, confirming the earnings-quality concern has resolved.
- P4Trend Breakdown With Improving Signals
Trip ifRSI falls below 40 and on-balance volume declines for 6 consecutive weeks, confirming the recovery setup has failed and the downtrend has resumed.
- P5News Gate And Earnings Miss
Trip ifEPS surprise exceeds 5% for 2 consecutive quarters with no new material news risks flagged, confirming the cautionary setup has fully cleared.