Adaptive Biotechnologies Corp (ADPT) stock intrinsic value fair value estimate & owner earnings analysis

Adaptive Biotechnologies sells clonoSEQ, an FDA-cleared test that detects minimal residual disease (MRD) in blood cancers, and runs a smaller Immune Medicine business (antibody and TCR research services, licensing and collaborations). In 2025 revenue was $277.0M, up 55%. MRD revenue was $212.3M (up 46%) and clonoSEQ tests delivered rose 39% to 105,587. That growth is real and multi-year, and costs have been trimmed: 2025 research and development spending fell 9% and cost of revenue was flat while revenue grew. The difficulty is that the business still does not generate cash for its owners. We measure owner earnings as operating cash flow, excluding working-capital swings, less stock-based compensation (a real cost we deduct once) and maintenance capital spending. On that basis owner earnings per diluted share were about -$1.16 (2020), -$1.61 (2021), -$1.29 (2022), -$1.33 (2023), -$0.97 (2024) and -$0.33 (2025). The 2025 figure is flattered: $36.7M of it is a drawdown of deferred revenue, mostly the Genentech collaboration ending and the cash Adaptive received earlier being recognized as revenue. Removing working-capital effects treats that as earned this year, so the underlying 2025 result is worse than -$0.33. In the first half of 2026 owner earnings were still about -$38M (roughly -$0.24 per share), or about -$0.48 per share annualized, on revenue up 28% to $142.4M. Stock compensation ($51.5M in 2025) is larger than the entire improvement in cash burn, and there is also an ongoing repayment obligation under a 2022 purchase agreement ($124.4M of net proceeds received; $11.8M of interest expense in 2025). All three cases come out at $0 per share. Our approach only credits growth that is contracted or is the output of a mechanism the business has proven, and only values a company on the cash it generates for owners. Growth in clonoSEQ volume is impressive, but it comes from expanding the market and winning share, and turning it into positive owner earnings requires operating leverage that has not yet appeared in the cash flows. We tested a favorable path (revenue growth tapering from 20%, keeping 40 cents of each new revenue dollar) and it only turns positive around 2029, resting on assumptions we cannot evidence today; with more modest growth the stream stays negative throughout. So the bull case is also $0, not a claim that the upside is nil. The bear case adds a cash-burning business with a debt-like repayment obligation and stock compensation that dilutes owners. Adaptive would need to keep burning cash or issue more shares. Important caveat: the $0 values follow our rule of valuing only owner earnings, not the balance sheet. Adaptive held $240.2M of cash and marketable securities at December 31, 2025 (including $13.1M held by a subsidiary), which funds the ongoing losses. That cash is not added on top of the cases, so at $0 the shares are not asserted to be worthless, only that we cannot show value beyond the cash funding the burn. The view would change if owner earnings turned positive for several consecutive quarters. The main way this analysis could be wrong is if clonoSEQ growth of 30 to 40% continues while spending stays flat, which would reach positive owner earnings sooner than we can currently demonstrate.