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

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Verastem, Inc. (VSTM) is headed down in the market in today’s trading session. The stock, one that is focused in the biotech space, is presently trading at $1.08 after a move down of -13.60% so far in today’s session. In terms of biotechnology companies, there are quite a few factors that have the ability to generate declines in the market. News is one of the most common reasons for movement. Here are the most recent trending headlines centered around VSTM:

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Oct-30-19 07:01AM The Daily Biotech Pulse: Novartis Program Placed On Partial Clinical Hold, Adcom Snub For Amag, Amgen Earnings
Oct-29-19 07:35PM Verastem (VSTM) Reports Q3 Loss, Misses Revenue Estimates
04:17PM Verastem Oncology Reports Third Quarter 2019 Financial Results and Recent Company Progress
Oct-23-19 07:00AM Verastem Oncology Announces COPIKTRA (Duvelisib) Presentations at the Lymphoma & Myeloma 2019 International Congress
Oct-17-19 07:00AM Verastem Oncology to Announce Third Quarter 2019 Financial Results and Corporate Update on October 29, 2019

However, when making an investing decision, prospective investors should take a look at much more than just news, this is especially the case in the highly speculative biotech space. Here’s what’s happening with Verastem, Inc..

Returns That VSTM Investors Have Seen

Although a decline in a single session, like what we’re seeing from Verastem, Inc. may lead to fear in some investors, that by itself should not be the reason for a decision to, or not to, invest in a company. It is generally smart to look into trends experienced by the stock for a period longer than a single trading session. When it comes to VSTM, below are the returns that investors have experienced:

  • Past 7 Days – Over the last 5 trading sessions, VSTM has produced a change in price amounting to -20.00%.
  • Monthly – The return from Verastem, Inc. in the last 30 days comes to -7.69%.
  • Past Quarter – Throughout the past three months, the company has generated a return on investment that comes to -32.08%
  • Past 6 Months – Throughout the past 6 months, we’ve seen a change that works out to -47.57% from the stock.
  • This Year So Far – Since the close of last year VSTM has produced a ROI of -67.86%.
  • Full Year – Finally, in the past full year, investors have seen performance that works out to -78.31% from VSTM. Throughout this period, the stock has sold at a high price of -82.94% and a low of 3.85%.

Ratios Worth Watching

Digging into a few key ratios associated with a company generally gives investors a view of how risky and/or potentially profitable a stock pick might be. Here are a few of the important ratios to consider when digging into VSTM.

Short Ratio – The short ratio is a measure of short interest. As the ratio climbs, it shows that more investors believe that the price of the stock is going to tumble. Across the sector, biotech stocks tend to come with a higher short ratio. On the other hand, we also see a lot of short squeezes in the space. Nonetheless, as it relates to Verastem, Inc., it’s short ratio clocks in at 17.35.

Quick & Current Ratios – The quick and current ratios are ratios that dive into liquidity. Basically, they measure If a company is able to pay its debts as they mature based on current assets or quick assets. Because many biotech companies rely heavily on the continuation of support from investors, the quick and current ratios can look upsetting. Nonetheless, quite a few better companies in the biotech space come with positive quick and current ratios. When it comes to VSTM, the quick and current ratios total up to 6.20 and 6.20 respectively.  

Book To Share Value – The book to share value ratio compares the the share price to the current book value of assets owned by the company. In this particular case, that ratio equates to 0.67.

Cash To Share Value – Finally, the cash to share value ratio compares the total cash on hand to the value of shares. Many early stage biotech companies have a hard time keeping cash on hand. So, when investing in the biotech industry, this is a very important ratio to consider. When it comes to VSTM, the cash to share value ratio is 2.53.

What Analysts Think About Verastem, Inc.

While it’s rarely a smart idea to avoid doing your DD and blindly following the opinions of analysts, it is a smart idea to use their analysis in order to validate your own when it comes to making an investment decision in the biotechnology sector. Below you’ll find the most recent moves that we’ve seen from analysts when it comes to VSTM.

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Jun-20-19 Downgrade BTIG Research Buy → Neutral
May-10-19 Downgrade Raymond James Outperform → Mkt Perform
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

Smart Money Follows Big Money

Humans that are into investing seem to be infatuated with the term “Smart money follows big money.” It makes sense. Big money became big money by making smart decisions in the market. So, by following the moves of big money institutions and insiders, we can get a glimpse of what market pros think about a stock. When it comes to big money interest in VSTM, here’s what we’re seeing:

Institutions own 37.60% of the company. Institutional interest has moved by -0.16% over the past three months. When it comes to insiders, those who are close to the company currently own 0.60% percent of VSTM shares. Institutions have seen ownership changes of an accumulative 0.00% over the last three months.

A Look 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 74.15M 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 69.07M.

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 21.33%.

Financial Results And Expectations

What have ween seen from VSTM in terms of financial results?Here’s what we’ve seen:

  • Analyst Expectations – As it stands at the moment, Wall Street analysts have expectations that Verastem, Inc. will come up with earnings per diluted share that comes to -1.58, with -0.46 being announced in the earnings announcement for the current quarter. Although this data is not tide to earnings, since we are talking about Wall Street analysts, the stock is currently graded as a 2.50 on a scale from 1 to 5 where 1 is the worst possible analyst grade and 5 is the best.
  • 5-Year Sales – Over the last half decade, Verastem, Inc. has reported a change in sales volume that adds up to 0. EPS through the last 5 years have experienced a change of 9.30%.
  • Q/Q – when it comes to quarter over quarter data, or Q/Q data as it is often explained in the human world, the company has created a change in earnings that amounts to -90.50%. The company has also experienced movement in terms of sales in the amount of -69.00%.

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