It’s not often that a genuine hidden-gem candidate appears in the market. But that label might apply to Chinese biotechnology firm Zai Lab (NASDAQ:ZLAB). Developing and commercializing a range of therapeutics, the company offers solutions for autoimmune disorders, infectious diseases and neurologic conditions. Arguably the most compelling business unit undergirding ZLAB stock, though, is oncology.

According to its public profile, Zai Lab features a cancer therapy called Optune. This innovation uses electric fields calibrated to specific frequencies to destroy tumor cells. Two factors make this therapeutic extraordinarily compelling: One, it’s non-invasive and two, it’s approved by the U.S. Food and Drug Administration.

Specifically, Optune is a device aimed at treating a type of brain cancer called glioblastoma multiforme. It’s also designed to be used alone once traditional treatment options such surgery and radiation have lost their effectiveness.

InvestorPlace - Stock Market News, Stock Advice & Trading Tips

Just recently, a study was published detailing how researchers have discovered that electrical currents can enhance the body’s natural killer cells to be even more effective against cancerous cells. Therefore, ZLAB stock warrants close attention from a scientific perspective alone.

Financial Projections Make the Case Even More Compelling

Right now, Wall Street analysts rate ZLAB stock a unanimous strong buy. Further, the average price target stands at $40.67, implying almost 116% upside potential. In addition, the high-side estimate calls for a price target of $63, implying almost 234%.

Why the robust enthusiasm? Primarily, the aforementioned cancer therapy is awfully enticing. However, regarding the financials, ZLAB stock appears exceptionally undervalued. At the moment, the market prices shares at 6.29x trailing-year sales. That’s below the biotech sector’s average sales multiple of 7.1x but that’s not the whole story.

Rather, investors should consider the forward projection. By the end of fiscal 2024, revenue could soar to $397.3 million. If so, that would translate to a 49% lift from last year’s print of $266.72 million. Assuming a shares outstanding count of 99.12 million, ZLAB stock is trading at 4.71x projected 2024 revenue. That’s super low for an equity that enjoys a unanimous strong buy rating.

Also, what’s intriguing here is that according to Barchart, ZLAB stock pinged as a J-Hook candidate late last week. A sinusoidal pattern that purports to signal a high probability of upside, ZLAB could be due for significant long-term gains.