Stock for Alzamend Neuro, Inc. (NASDAQ: ALZN) has been one of the big premarket movers today, seeing a 25.2% climb. This growth trajectory traces back to Tuesday last week, with ALZN gaining 22% since. Being in trade since mid-June last year, the stock has come far from its initial peak of $13.50 to $1.11. The company is an early-stage preclinical biopharmaceutical business, focused on Alzheimer’s, is still well before its revenue-generating phase. Investors rushing to get hold of ALZN anticipates long-term growth, which is broadly shaping present market perception. The present value of this growth potential strongly contributes to the stock’s intrinsic value, deeming it to be undervalued until yesterday.
ALZM Potential and Prospects
The reason why ALZM is seeing hype is due to the perception of it being potentially undervalued, given its growth prospects. Focused on Alzheimer’s, the company is working towards a desperately demanded treatment across the world. The disease currently has no active treatment, therefore a breakthrough could change the very dynamics of Alzheimer’s treatment. If an outcome such as this were to see daylight, investors would likely see their share in ALZM ballooning to double and potentially even triple digits.
Alzamend Cash Burn – Cause for Concern?
One crucial financial domain market watchers have been specifically focusing on is the cash burn rate for Alzamend Neuro Inc. This is an especially critical metric to assess the performance of an early-stage biopharmaceutical. ALZN’s, whilst not generating revenue at this stage had a cash burn of $6.3M in 2021. Currently, the company holds $12M in cash without any debt obligations, giving it a burn-off period of roughly 22 months.
These fundamentals are no cause of concern, given the company’s market capitalization of$91.15M as of present. This puts Alzamend’s cash burn at merely 6.9% of its overall market capitalization, which is well beneath risk levels. This points to the ease with which the company can raise further financing to fund its growth and overall development programs.
Conclusion
ALZM is currently undergoing a rush, with the market collectively anticipating future growth. Given the nature of the disease the company is targeting, a breakthrough could lead to an exponential growth swing. Critical financial fundamentals such as cash burn rate, and market capitalization indicate the moderately low-risk level associated with ALZN, further enhancing market optimism.
