Are Verastem Inc. (NASDAQ:VSTM) Prospects Worsening?

Verastem Inc. (NASDAQ:VSTM) Relative Strength Index (RSI) is 72.06, with weekly volatility at 6.57% and ATR at 0.15. The VSTM stock’s 52-week price range has touched low of $1.08 and a $4.67 high. Intraday shares traded counted 5.3 million, which was -59.1% lower than its 30-day average trading volume of 3.33M. Its shares traded lower over the last trading session, losing -5.02% on 12/14/20. The shares fell to a low of $2.222 before closing at $2.27. VSTM’s previous close was $2.39 while the outstanding shares total 169.51M. The firm has a beta of 1.23.

Investors have identified the Biotechnology company Verastem Inc. as an interesting stock but before investments are made there, an in-depth look at its trading activities will have to be conducted. The share is trading with a market value of around $387.03 million, the company now has both obstacles and catalysts that affect them and they came from their mode of operations. With the company affected by events currently, it is a perfect time to analyze the numbers behind the firm in order to come up with a rather realistic picture of what this stock is.

Verastem Inc. (VSTM) Fundamentals that are to be considered.

When analyzing a stock, the first fundamental thing to take into account is the balance sheet. How healthy the balance sheet of a company is will determine if the company will be able to carry out all its financial and non-financial obligations and also keep the faith of its investors. For VSTM, the company has in raw cash 179.84 million on their books with 9.3 million currently as liabilities. How the trend is over time is what investors should be concerned about. The company has a healthy balance sheet as their debt profile has been on an incline. In terms of their assets, the company currently has 188.56 million total, with 37.68 million as their total liabilities.

VSTM were able to record -11.84 million as free cash flow during the Q3 2020 quarter of the year, this saw their quarterly net cash flow reduce by 126.45 million. In cash movements, the company had a total of -11.8 million as operating cash flow.

Potential earnings growth for Verastem Inc. (VSTM)

In order to determine the future investment potential for this stock, we will have to analyze key trends that affect it. During the Q3 2020 quarter of the year, Verastem Inc. recorded a total of 78.65 million in revenue. This figure implies that they witnessed a quarterly year/year change in their earnings with 88.52% coming in sequential stages and their sales for the Q3 2020 quarter increasing by 94.52%.

What matters though is how it ends. When the core data for the company is broken down, then the stock sounds interesting. The company spent 32.06 million trying to sell their products during the last quarter, with the result yielding a gross income of 46.59 million. This allows shareholders to hold on to 169.51M with the recently reported earning now reading 0.08 cents per share. This is a figure that compared to analyst’s prediction for their Q3 2020 (0.08 cents a share).

Having a look at the company’s valuation, the company is expected to record -0.28 total earnings per share during the next fiscal year. It is very important though to remember that the importance of trend far outweighs that of outlook. This analysis has been great and getting further updates on VSTM sounds very interesting.

Is the stock of VSTM attractive?

In related news, Director, BARBERICH TIMOTHY J bought 50,000 shares of the company’s stock in a transaction that recorded on Dec 04. The purchase was performed at an average price of 2.17, for a total value of 108,500. As the purchase deal closes, the 10% Owner, RA CAPITAL MANAGEMENT, L.P. now sold 1,161,300 shares of the company’s stock, valued at 2,219,941. Also, 10% Owner, RA CAPITAL MANAGEMENT, L.P. sold 1,301,300 shares of the company’s stock in a deal that was recorded on Apr 27. The shares were cost at an average price of 2.31 per share, with a total market value of 3,002,099. In the last 6 months, insiders have changed their ownership in shares of company stock by 1.10%.

1 out of 2 analysts covering the stock have rated it a Buy, while 1 have maintained a Hold recommendation on Verastem Inc.. 0 analysts has assigned a Sell rating on the VSTM stock. The 12-month mean consensus price target for the company’s shares has been set at $3.83.

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