Verastem, Inc. (VSTM) Stock: Here’s Why It’s Down


Verastem, Inc. (VSTM) is working its way for to the bottom in the market in today’s trading session. The stock, one that is focused on the biotech space, is currently trading at $2.84 after falling -5.65% so far today. In terms of biotechnology companies, there are several factors that have the potential to generate price movement in the market. News tends to be one of the biggest reasons for the movement. Here are the recent trending headlines surrounding VSTM:

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Apr-04-19 04:05PM Verastem Oncology Announces Inducement Grants Under Nasdaq Listing Rule 5635(c)(4)
Apr-02-19 07:00AM Verastem Oncology to Present at the H.C. Wainwright Global Life Sciences Conference
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

However, when making a decision to invest, prospective investors should focus on much more than just news, especially in the generally speculative biotech sector. Here’s what’s happing when it comes to Verastem, Inc..

How VSTM Has Been Trending

While a decline in a single session, like the move that we’re seeing from Verastem, Inc. may cause fear in some investors, a single session move alone should not be the reason for a decision to, or not to, invest in a company. It is generally important to take a look at trends just a single trading day. When it comes to VSTM, below are the returns on investment that investors have experienced:

  • Past Seven Days – In the past five trading sessions, VSTM has generated a change in price in the amount of -6.27%.
  • Monthly – The monthly ROI from Verastem, Inc. has been -4.38%.
  • Past Quarter – In the past 3 months, the company has generated a return that works out to -29.70%
  • Past Six Months – In the past 6 months, we have seen a change that equates to -59.02% from the company.
  • YTD – Since the close of last year VSTM has produced a ROI of -15.48%.
  • Annually – Finally, over the past year, investors have seen a change of -13.41% from VSTM. Over this period of time, the stock has traded at a high price of -72.56% and a low price of 8.81%.

Ratios Worth Watching

Looking at a few ratios having to do with a stock can provide investors a look of how dangerous and/or rewarding a stock pick may be. Below are a few of the important ratios to consider when digging into VSTM.

Short Ratio – The short ratio is a measure of short interest. The higher this short ratio, the more investors believe that the stock is going to tumble. Across the sector, biotech stocks can have a higher short ratio. On the other hand, we also tend to see quite a few short squeezes in the space. Nonetheless, in regard to Verastem, Inc., it’s short ratio is 8.81.

Quick & Current Ratios – The quick and current ratios are tools that measure liquidity. Basically, they measure whether or not a company can pay for its debts as they mature based on current assets or quick assets. Because many biotech companies are reliant on continued investor support, the current and quick ratios can look damning. Nonetheless, several gems in the biotechnology industry do have great current and quick ratios. As it relates to VSTM, the quick and current ratios work out to 6.80 and 6.80 respectively.  

Book To Share Value – The book to share value ratio compares the the share price to the book value of assets that are owned by the company. when it comes to Verastem, Inc., the book to share value ratio is 1.69.

Cash To Share Value – Finally, the cash to share value ratio compares the total amount of cash the company has on hand to the price of shares. Many clinical stage biotechnology companies struggle to keep cash on hand. So, when investing in the biotech sector, this is an important ratio to consider. In the case of VSTM, the cash to share value ratio comes to 3.40.

How Analysts Feel About Verastem, Inc.

Although it’s never a good idea to unknowingly follow the opinions of analysts, it is a smart idea to use their opinions when validating your own thoughts before making an investment decision in the biotech space. Below are the recent moves that we have 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

Big Money And Verastem, Inc.

An interesting fact that I have come to understand in my short time on Earth has been that smart investors tend to follow the moves made by big money players. Usually, investors that are looking to keep the risk down will follow investments made by institutions and insiders. So, is big money interested in regard to VSTM? Here’s the scoop:

  • Institutions – At the moment, institutions own 61.10% of the company. However, it is worth mentioning that the ownership held by institutions has changed in the amount of -0.08% throughout the past quarter.
  • Insider Holdings – As far as insiders go, those close to the company currently own 0.20% of Verastem, Inc.. Their ownership of the company has changed in the amount of 28.99% throughout the past quarter.

How Many Shares Of VSTM Are Available?

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 73.41M 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 67.16M.

I also find it important to take a look at the short percentage of the float. After all, if a high percentage of the float available for trading is shorted, the overall opinion in the market is that the stock is headed for a deep dive. When it comes to VSTM, the percentage of the float that is shorted currently sits at 36.01%. Most investors would say that a concerning short percent of the float would be considered to be anything over 40%. Nonetheless, I have found that any short percent of the float over 26% is likely a risky play.


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

  • Analyst Expectations – At the moment, analysts are expecting that the company will create earnings per diluted share in the amount of -1.01, with -0.47 to be reported in the report for the current quarter. Although this data is not associated with earnings, since we’re chatting on the topic of Wall Street analysts, Verastem, Inc. is presently graded as a 1.80 on a scale from 1 to 5 where 1 is the poorest possible analyst rating and 5 is the best possible rating.
  • 5-Year Sales – Throughout the last half decade, Verastem, Inc. has generated a movement in revenue that works out to be 0. EPS through the past half decade have generated movement in the amount of 9.30%.
  • Quarter Over Quarter – when it comes to quarter over quarter earnings performance, or Q/Q data as it is often explained in today’s society, Verastem, Inc. has seen a earnings change by 64.50%. VSTM has also seen movement when it comes to revenue in the amount of 0.

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