AVTX
Q1 was less ugly than feared
Avalo Therapeutics came in with a first-quarter loss of 98 cents a share, which beat Wall Street’s 1.13-cent-per-share loss estimate. So the company didn’t exactly throw a victory parade, but it did avoid the kind of earnings faceplant investors hate.
The analysts arrived with scissors and confetti
Once the numbers hit, the price-target tweaks started rolling in. HC Wainwright kept a Buy rating but trimmed its target from $40 to $35. Mizuho stuck with Outperform and actually lifted its target from $39 to $45. Wedbush also stayed at Outperform, though it shaved its target from $40 to $34.
That’s basically Wall Street saying, “We still like the story, but maybe don’t get too carried away.” The stock closed at $19.85 on Wednesday, so even with the target cuts, the Street still sees plenty of upside baked into the pipeline.
Why investors should care
The bigger story here isn’t the quarterly loss. It’s that Avalo is trying to turn its Phase 2 LOTUS data for abdakibart into a registrational Phase 3 program, and that’s where the real valuation debate lives. If the drug keeps looking promising, the market may care a lot less about a noisy quarterly EPS miss and a lot more about whether this asset can become a real treatment for hidradenitis suppurativa.
Big picture: Avalo is still very much a biotech story, which means one good readout can change the mood fast. But for now, analysts are sending a mixed signal: still interested, just a little less euphoric than last week.