GuruFocus Financial Strength Rank measures how strong a company's financial situation is. It is rated on a scale of 1 to 10 and is based on these factors:
1. The debt burden that the company has as measured by its Interest Coverage (current year). The higher, the better.
2. Debt to revenue ratio. The lower, the better.
3. Altman Z-Score.
4. Other debt related ratios.
A higher score indicates a stronger financial position, with companies rated 7 or above considered financially stable and unlikely to face distress. Conversely, a score of 3 or below suggests potential financial difficulties, indicating a higher risk of distress.
Zai Lab did not have earnings to cover the interest expense.
Zai Lab's debt to revenue ratio for the quarter that ended in Mar. 2026 was 0.58.
As of today, Zai Lab's Altman Z-Score is 0.06.
Zai Lab (NAS:ZLAB) Financial Strength Explanation
The rank is rated on a scale of 1 to 10. A higher score indicates a stronger financial position, with companies rated 7 or above considered financially stable and unlikely to face distress. Conversely, a score of 3 or below suggests potential financial difficulties, indicating a higher risk of distress.
Zai Lab has the Financial Strength Rank of 5.
Zai Lab Financial Strength Related Terms
ZLAB vs STOK, ADMA, VRDN: Financial Strength Comparison
For the Biotechnology subindustry, Zai Lab's Financial Strength, along with its competitors' market caps and Financial Strength data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Zai Lab Financial Strength vs Biotechnology Industry
For the Biotechnology industry and Healthcare sector, Zai Lab's Financial Strength distribution charts can be found below:
* The bar in red indicates where Zai Lab's Financial Strength falls into.
Interest Coverage is a ratio that determines how easily a company can pay interest expenses on outstanding debt. It is calculated by dividing a company's Operating Income (EBIT) by its Interest Expense:
Z-Score model is an accurate forecaster of failure up to two years prior to distress. It can be considered the assessment of the distress of industrial corporations.
The zones of discrimination were as such:
When Z-Score is less than 1.81, it is in Distress Zones.
When Z-Score is greater than 2.99, it is in Safe Zones.
When Z-Score is between 1.81 and 2.99, it is in Grey Zones.
Zai Lab has a Z-score of 0.06, indicating it is in Distress Zones. This implies bankrupcy possibility in the next two years.
Warning Sign:
Altman Z-score of 0.06 is in distress zone. This implies bankruptcy possibility in the next two years.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Zai Lab (ZLAB) has a Financial Strength of 5 as of Mar. 2026. The financial strength rank measures the strength of a company's balance sheet based on revenue and debt. View historical data on Zai Lab and its competitors. This is 29% below median its historical median of 7.00. Over the past decade, Zai Lab's Financial Strength has ranged from 4.00 to 9.00.
Is Zai Lab's Financial Strength too high?
Zai Lab's current Financial Strength of 5 is 29% below median its 10-year median of 7.00. Over the past 10 years, this metric has ranged from a low of 4.00 to a high of 9.00. Overall, Zai Lab has a GF Score™ of 64/100 and is considered Possible Value Trap, reflecting its overall financial health beyond just this single metric.
How does Zai Lab's Financial Strength compare to STOK and ADMA?
Zai Lab's Financial Strength of 5 can be compared against companies in the Biotechnology industry. Historically, Zai Lab's own Financial Strength has ranged from 4.00 to 9.00 over the past decade. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Financial Strength for a Biotechnology company?
A good Financial Strength depends on the Biotechnology industry context. However, Financial Strength should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Financial Strength mean?
A high Financial Strength can signal that a stock is expensive relative to its fundamentals. The financial strength rank measures the strength of a company's balance sheet based on revenue and debt. View historical data on Zai Lab and its competitors. Zai Lab's current Financial Strength is 5, which is 29% below median its own 10-year median of 7.00. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Zai Lab stock overvalued right now?
Based on GuruFocus' analysis, Zai Lab (ZLAB) is currently considered Possible Value Trap. The stock's GF Value™ is $30.25, compared to a current price of $19.14 — trading 36.7% below its estimated fair value. The current Financial Strength is 5, which is 29% below median its 10-year median of 7.00. Zai Lab's overall GF Score™ is 64/100 with 8 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Financial Strength calculated?
Financial Strength is calculated from a company's financial statements. For Zai Lab (ZLAB), the current Financial Strength is 5 as of Mar. 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is Zai Lab (ZLAB) Overvalued in 2026?
Based on GuruFocus' analysis, Zai Lab stock appears to be undervalued.
The current stock price of $19.14 is trading 36.7% below its estimated GF Value™ of $30.25.
GuruFocus considers Zai Lab to be Possible Value Trap.
Key valuation signals for ZLAB:
Financial Strength: 5 (29% below median its 10-year median of 7.00)
GF Value™: $30.25 vs. price of $19.14 (36.7% below fair value)
No single metric tells the full story. See the ZLAB stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Zai Lab Ltd is a biopharmaceutical company focusing on discovering or licensing, developing, and commercializing proprietary therapeutics that address areas of unmet medical need including in the fields of oncology, autoimmune and infectious diseases. Zai Lab has a diverse pipeline of potentially first-in-class product candidates developed through in-house R&D and global partnerships. The company has successfully commercialized several products in China, including Zejula, Optune, Qinlock, and Nuzyra, with plans for further expansion The pipeline of proprietary drug candidates of the company includes ZL-1222, ZL-1311, ZL-6201 and many others.
64GF Score
Get the complete analysis for ZLAB
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