Verastem, Inc. (VSTM) Stock: Here’s What’s Happening

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Verastem, Inc. (VSTM) is headed down in the market today. The company, one that is focused in the biotechnology industry, is presently trading at $2.92 after heading down -9.88% so far today. When it comes to biotech companies, there are quite a few factors that have the potential to lead to movement in the market. One of the most common is news. Here are the most recent stories surrounding VSTM:

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Mar-13-19 10:42AM Verastem (VSTM) Q4 2018 Earnings Conference Call Transcript
07:27AM The Daily Biotech Pulse: AEterna Zentaris Explores Options, Verastem Plunges On Weak Copiktra Sales, FDA Nod For Aerie
02:02AM Edited Transcript of VSTM earnings conference call or presentation 12-Mar-19 8:30pm GMT
Mar-12-19 06:30PM Verastem (VSTM) Reports Q4 Loss, Misses Revenue Estimates
05:33PM Verastem: 4Q Earnings Snapshot

However, any time investors are making a decision with regard to investing, investors should take a look at far more than just news, this is especially the case in the speculative biotech space. Here’s what’s going on with Verastem, Inc..

The Performance That We’ve Seen From VSTM

Although a move toward the top in a single session, like the fall that we’re seeing from Verastem, Inc. may make some investors upset, that alone should not be the basis of a decision to, or not to, buy a company’s stock. It’s always important to dig into trends just a single trading day. As it relates to VSTM, below are the returns on investment that we’ve seen:

  • Past 5 Sessions – Throughout the past seven days, VSTM has produced a change in price in the amount of 3.85%.
  • Past 30 Days – The monthly ROI from Verastem, Inc. comes to 2.86%.
  • Quarterly – Over the last 3 months, the stock has produced a return that works out to -27.03%
  • Bi-Annually – Over the previous 6 months, investors have seen a change that amounts to -63.96% from the company.
  • This Year So Far – Since the open of this year VSTM has generated a ROI of -3.57%.
  • Full Year – Finally, over the last year, we have seen movement amounting to -6.09% from VSTM. In this period, the stock has sold at a high of -71.79% and a low price of 11.88%.

Ratios That Are Notable

Digging into a few key ratios having to do with a stock can provide traders a view of just how risky and/or potentially profitable a an investment option might be. Below are a few of the important ratios to think about when looking at VSTM.

Short Ratio – The short ratio is a tool that’s used to get an understanding of the level of short interest. As the ratio goes higher, it shows that more investors have a belief that the value of the stock is going to go down. Across the sector, biotech stocks can carry a higher short ratio. On the other hand, we also tend to see quite a few short squeezes in the industry. Nonetheless, with regard to Verastem, Inc., it’s short ratio comes to 9.31.

Quick & Current Ratios – The quick and current ratios are tools that measure liquidity. Essentially, they measure If a company is able to cover its debts when they mature with only current assets or quick assets. Because many biotech many companies rely heavily on continued investor support, the current and quick ratios can seem upsetting. Nonetheless, quite a few good picks in the biotech space come with strong current and quick ratios. When it comes to VSTM, the quick and current ratios total up to 3.00 and 3.00 respectively.  

Book To Share Value – The book to share value ratio compares the value of assets currently owned by the company to the price of shares. In this case, that ratio works out to 1.46.

Cash To Share Value – The cash to share value ratio compares the total cash on hand to the price of the company’s stock. Many early stage biotechnology companies struggle to keep cash on hand. So, when investing in the biotech space, this is an important ratio to look into. As it relates to VSTM, the cash to share value ratio works out to 1.96.

What Analysts Think About Verastem, Inc.

While it’s never a smart idea to avoid doing your DD and blindly following the opinions of analysts, it is a good idea to consider their opinions when validating your own opinions before making an investment decision in the biotechnology sector. Below you’ll find|Here are} the recent moves that we’ve seen from analysts as it relates to VSTM.

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Jul-13-18 Initiated BTIG Research Buy $17
May-02-18 Initiated Seaport Global Securities Buy $14
Mar-08-18 Initiated B. Riley FBR, Inc. Buy $15
Sep-07-17 Reiterated H.C. Wainwright Buy $6.50 → $10
Apr-13-17 Initiated Oppenheimer Outperform

Smart Money Follows Big Money

An interesting fact I have come to understand in my short time here has been that good investors tend to follow big money. Usually, investors that want to keep their investments relatively safe will follow trades made by institutional investors as well as those on the inside. So, is big money interested as it relates to VSTM? Here’s the scoop:

Institutions own 61.30% of the company. Institutional interest has moved by 20.67% over the past three months. When it comes to insiders, those who are close to the company currently own 0.50% percent of VSTM shares. Institutions have seen ownership changes of an accumulative 8.94% over the last three months.

Looking At Share Counts

Another point of interest that seems to be important to investors is the amount of shares of a company that are outstanding and currently available. At the moment, there are 74.34M shares of Verastem, Inc. outstanding. Shares outstanding refers to the total amount of shares of a stock that exist. As far as the float goes, or the amount of shares that are actually available on the retail market, VSTM has a float of 71.32M.

Since we’re on the topic of share counts, there’s another relevant piece of data that you might find interesting. That would be the short percentage of the float. Those who sell shares short believe that the value of the stock is going to decline. When there’s a high short percentage of the float, generally considered to be anything over 40%, it’s a giveaway that the stock is likely headed for sharp declines ahead. Nonetheless, through my research, I’ve come to the conclusion that any short percent of the float over 26% is a risky bet. When it comes to VSTM, the short percent of the float is 32.62%.

What We’ve Seen In earnings results

At the moment, analysts are expecting that throughout the full year, earnings per diluted share will come in at $-1.48. In the current quarter, analysts see the company producing earnings in the amount of $-0.53. Over the last 5 years, VSTM has generated revenue in the amount of $0 with earnings coming in at -0.70%. On a quarter over quarter basis, earnings have seen movement of 52.10% and revenue has seen movement of 0.

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