Verastem, Inc. (VSTM) Stock: A Biotech Stock That’s Making Its Way For The Bottom

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Verastem, Inc. (VSTM) is trending down in the market today. The stock, one that is focused in the biotech industry, is currently priced at $3.24 after tumbling -6.90% so far today. When it comes to biotechnology stocks, there are several factors that have the ability to cause movement in the market. News is one of the most common reasons for movement. Here are the most recent stories surrounding VSTM:

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Mar-18-19 04:08PM Edited Transcript of VSTM earnings conference call or presentation 12-Mar-19 8:30pm GMT
Mar-14-19 03:00PM 3 Penny Stocks That Could Make You Rich — or Regretful
Mar-13-19 01:59PM Why Verastem Stock Broke Down Today
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

Nonetheless, any time investors are making a decision to invest, investors should look into far more than news, especially in the highly speculative biotechnology space. Here’s what’s happening with Verastem, Inc..

The Performance That VSTM Investors Have Experienced

While a decline in a single session, like what we’re seeing from Verastem, Inc. may make some investors tremble, a single session decline by itself shouldn’t be the basis of a decision to, or not to, buy a company’s stock. It’s generally smart to look into trends for a period longer than a single trading day. When it comes to VSTM, here are the movements that investors have experienced:

  • Past 5 Sessions – In the last five trading sessions, VSTM has generated a price change in the amount of 4.18%.
  • Monthly – The monthly performance from Verastem, Inc. works out to 1.89%.
  • Quarterly – Over the past quarter, the stock has generated a return on investment that works out to -5.81%
  • Past Six Months – Over the past 6 months, we have seen a change that amounts to -63.31% from the company.
  • Year To Date – Since the close of last year VSTM has resulted in a ROI of -3.57%.
  • Annually – Finally, in the past full year, we’ve seen performance of 3.18% out of VSTM. In this period of time, the stock has sold at a high of -68.70% and a low of 24.14%.

Rations That Investors Should Look Into

Looking at various key ratios having to do with a stock can provide traders an understanding of how risky and/or potentially profitable a stock pick may be. Below are a few of the most important ratios to look at when digging into VSTM.

Short Ratio – The short ratio is a measure of short interest. The higher this ratio, the more investors are expecting that the value of the stock is going to go down. In general, biotech stocks tend to come with a higher short ratio. However, we tend to see quite a few short squeezes in the sector. Nonetheless, in regard to Verastem, Inc., it’s short ratio comes to 8.41.

Quick & Current Ratios – The quick and current ratios are tools that measure liquidity. Basically, they measure the company’s abilities to pay its debts when they mature using quick assets or current assets. Because many biotech companies rely heavily on continued support from investors, these ratios can look damning. However, several better companies in the biotechnology space come with good quick and current ratios. In terms of VSTM, the quick and current ratios total up to 6.80 and 6.80 respectively.  

Book To Share Value – The book to share value ratio compares the value of assets owned by the company to the price of shares. In this particular case, that ratio is 1.68.

Cash To Share Value – Finally, the cash to share value comparison compares the amount of cash the company has on hand to the value of the company’s stock. Several early stage biotechnology companies have a hard time keeping cash on hand. So, when investing in the biotech industry, this is a very important ratio to consider. In this case, the cash to share value comes to 3.32.

What Analysts Say About Verastem, Inc.

While it’s not a smart idea to blindly follow the opinions of analysts, it is a smart idea to consider their thoughts when validating your own opinions before making investment decisions in the biotech sector. Here are the most recent moves that we have seen from analysts when it comes 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

What Are Big Money Players Doing With Verastem, Inc.

One thing that I’ve come to understand so far in my brief time in existence is that smart investors tend to follow big money investors. In general, investors that want to keep the risk down will watch investments made by institutional investors and insiders. With that said, what does the big money picture look like in regard to VSTM? Here’s the information:

Institutions own 61.30% of the company. Institutional interest has moved by 20.35% 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 20.28% over the last three months.

What You Need To Know About Share Counts

Traders seem to like to know the amounts of shares both available and outstanding. In regard to Verastem, Inc., currently there are 75.31M and there is a float of 71.32M. This means that out of the total of 75.31M shares of VSTM in existence today, 71.32M are able to trade hands in the public space.

It’s also important to follow the short percent. After all, if a large percentage of the float is sold short, the overall opinion in the market is that the company is headed for a deep dive. When it comes to VSTM, the short percentage of the float is currently 33.33%. Most traders believe that a concerning short percent of the float would be considered to be anything over 40%. Through my work, I’ve calculated that a short percent of the float over 26% is probably going to be a risky play.

What We’ve Seen In Financial Results

What have ween seen from VSTM in terms of financial results?Here’s the data:

  • Analyst Expectations – As it stands at the moment, analysts have expectations that VSTM will come up with EPS in the amount of -0.87, with -0.49 to be announced in the earnings report for the current quarter. Although this isn’t based on earnings, since we are talking on the topic of analysts, Verastem, Inc. is currently graded as a 1.80 when rated on a scale from 1 to 5 on which 1 is the poorest Wall Street analyst rating and 5 is the best rating.
  • 5-Year Sales – Throughout the past 5 years, Verastem, Inc. has generated a movement in sales volume in the amount of 0. Earnings per share through the last 5 years have generated a change of 0.
  • Quarter Over Quarter – In terms of quarter over quarter earnings performance, or Q/Q data as it is generally represented in the world of humans, Verastem, Inc. has seen a change in earnings that comes to a total of 0. Verastem, Inc. has also moved the needle in regard to sales that totals 0.

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