A History of Outperforming Analyst Forecasts and Beating the Odds: Roivant Sciences Ltd. (ROIV)

Roivant Sciences Ltd. (NASDAQ: ROIV) stock jumped 0.26% on Friday to $3.80 against a previous-day closing price of $3.79. With 1.01 million shares changed hands, the volume of the stock remained heavier than its average volume of 1.0 million shares. During the session, the Biotechnology company that operates in wider Healthcare sector, reached to the highest price of $3.8500 whereas the lowest price it dropped to was $3.7300. The 52-week range on ROIV shows that it touched its highest point at $16.76 and its lowest point at $2.52 during that stretch. It currently has a 1-year price target of $11.57.

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Price Performance and Earnings:

Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of ROIV was down-trending over the past week, with a drop of -7.99%, but this was down by -21.16% over a month. Three-month performance dropped to -4.04% while six-month performance fell -45.87%. The stock lost -61.62% in the past year, while it has lost -62.30% so far this year. A look at the trailing 12-month EPS for ROIV yields -1.25 with Next year EPS estimates of -1.27. For the next quarter, that number is -0.33. This implies an EPS growth rate of -6.80% for this year and -0.70% for next year.

Float and Shares Shorts:

At present, 692.21 million ROIV shares are outstanding with a float of 434.21 million shares on hand for trading. On Jul 14, 2022, short shares totaled 8.15 million, which was 1.16% higher than short shares on Jun 14, 2022. In addition to Mr. Matthew Gline as the firm’s CEO & Director, Dr. Eric Venker M.D., Pharm.D. serves as its Pres & COO.

Institutional Ownership:

Through their ownership of 49.84% of ROIV’s outstanding shares, institutional investors have minority control over the company. Other institutions hold 33.66% of ROIV, in contrast to 15.16% held by mutual funds. Shares owned by individuals account for 1.28%. As the largest shareholder in ROIV with 18.47% of the stake, QVT Financial LP holds 129,393,817 shares worth 129,393,817. A second-largest stockholder of ROIV, Viking Global Investors LP, holds 88,238,700 shares, controlling over 12.59% of the firm’s shares. Anchorage Capital Group LLC is the third largest shareholder in ROIV, holding 4,832,642 shares or 0.69% stake.

An Overview of Recent Financials:

Understanding a company as a customer does not mean you will understand it as an investor. The wise investor uses quantitative research to analyze metrics such as revenue, net income, and earnings. In its fiscal quarter reported on Mar 30, 2022, ROIV reported revenue of $9.22M and operating income of -$126.91M. Over the past year, revenue came in at $55.29M while operating income stood at -$1.35B. It generated -$270.06M net income for the quarter, which came to -$845.26M over the last twelve months. The EBITDA in the recently reported quarter was $375.89M and diluted EPS was -$0.39. EBITDA for the full year was -$1.20B.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for ROIV since 8 analysts follow the stock currently. There are 8 analysts who recommend BUY ratings, while 0 suggest SELL ratings. Of the remaining analysts, 0 believe that the stock is worth HOLDING, 0 give it an OVERWEIGHT rating, and 0 thinks that it’s UNDERWEIGHT. In the same way, a target price assigned to a stock can also reveal much about its potential. With ROIV analysts setting a high price target of $16.00 and a low target of $7.00, the average target price over the next 12 months is $11.57. Based on these targets, ROIV could surge 321.05% to reach the target high and rise by 84.21% to reach the target low. Reaching the average price target will result in a growth of 204.47% from current levels.

EPS: Estimates vs Actual

It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy. ROIV will report FY 2023 earnings on 06/27/2023. Analysts have provided yearly estimates in a range of -$1.09 being high and -$1.67 being low. For ROIV, this leads to a yearly average estimate of -$1.34. The earnings surprise of a firm occurs when the actual results change from the consensus earnings estimate. Roivant Sciences Ltd. surprised analysts by $0.03 when it reported -$0.27 EPS against a consensus estimate of -$0.31. The surprise factor in the prior quarter was -$0.16. Based on analyst estimates, the high estimate for the next quarter is -$0.28 and the low estimate is -$0.40. The average estimate for the next quarter is thus -$0.32.

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