ALVO Should I Buy
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Alvotech SA (ALVO) is not a strong buy for a beginner, long-term investor at this time. The stock faces significant negative catalysts, including regulatory setbacks and legal investigations, alongside weak technical indicators and declining financial performance. While there are some positive developments, such as revenue growth and biosimilar study success, these are overshadowed by broader risks. A hold strategy is recommended until clearer positive momentum emerges.
The technical indicators for ALVO are bearish. The MACD is negatively expanding, the RSI is neutral but leaning towards oversold territory, and the moving averages indicate a downward trend (SMA_200 > SMA_20 > SMA_5). The stock is trading near its key support level of 4.75, with resistance at 5.09. Overall, the technical outlook suggests weakness.
Alvotech's AVT80 biosimilar study achieved primary endpoints, enhancing market competitiveness.
Revenue increased by 10.56% YoY in Q3 2025, showing some growth momentum.
Gross margin improved by 12.91% YoY, indicating better cost efficiency.
The FDA issued a Complete Response Letter, leading to a 34% stock drop and raising concerns about manufacturing capabilities.
Legal investigations are underway regarding potential misleading business information.
Net income and EPS declined significantly in Q3 2025, with net income down 53.90% YoY and EPS down 50%.
In Q3 2025, revenue increased by 10.56% YoY to $113.86M, and gross margin improved to 69.26% (up 12.91% YoY). However, net income dropped by 53.90% YoY to -$5.25M, and EPS fell by 50% to -0.02, highlighting profitability challenges.
Analyst sentiment is mixed. Barclays initiated coverage with an Underweight rating and a $5 price target, citing industry transition challenges. Morgan Stanley and UBS lowered price targets to $10 (from $14 and $13, respectively) but maintained Overweight and Buy ratings, reflecting cautious optimism in the long term.
