Does Forma Therapeutics Holdings Inc. (FMTX) offer a good opportunity for investors?

Forma Therapeutics Holdings Inc. (NASDAQ: FMTX) stock fell -0.05% on Friday to $19.92 against a previous-day closing price of $19.93. With 1.15 million shares changed hands, the volume of the stock remained lighter than its average volume of 1.33 million shares. During the session, the Biotechnology company that operates in wider Healthcare sector, reached to the highest price of $19.96 whereas the lowest price it dropped to was $19.92. The 52-week range on FMTX shows that it touched its highest point at $24.99 and its lowest point at $4.95 during that stretch. It currently has a 1-year price target of $20.60.

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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 FMTX was down-trending over the past week, with a drop of -0.05%, but this was up by 72.62% over a month. Three-month performance surged to 206.46% while six-month performance rose 102.44%. The stock lost -12.78% in the past year, while it has gained 40.08% so far this year. A look at the trailing 12-month EPS for FMTX yields -4.00 with Next year EPS estimates of -3.67. For the next quarter, that number is -1.08. This implies an EPS growth rate of -13.60% for this year and 5.10% for next year.

Float and Shares Shorts:

At present, 47.81 million FMTX shares are outstanding with a float of 45.41 million shares on hand for trading. On Aug 30, 2022, short shares totaled 1.73 million, which was 3.62% higher than short shares on Jul 28, 2022. In addition to Mr. Frank D. Lee as the firm’s Pres, CEO & Director, Mr. Todd E. Shegog serves as its Sr. VP & CFO.

Institutional Ownership:

Through their ownership of 90.27% of FMTX’s outstanding shares, institutional investors have majority control over the company. Other institutions hold 68.42% of FMTX, in contrast to 25.88% held by mutual funds. Shares owned by individuals account for 13.20%. As the largest shareholder in FMTX with 18.89% of the stake, RA Capital Management LP holds 9,040,309 shares worth 9,040,309. A second-largest stockholder of FMTX, Armistice Capital LLC, holds 4,736,000 shares, controlling over 9.90% of the firm’s shares. Deep Track Capital LP is the third largest shareholder in FMTX, holding 4,050,000 shares or 8.46% stake. With a 2.01% stake in FMTX, the Vanguard Total Stock Market Index is the largest stakeholder. A total of 960,968 shares are owned by the mutual fund manager. The iShares Russell 2000 ETF, which owns about 1.54% of FMTX stock, is the second-largest Mutual Fund holder. It holds 735,024 shares valued at 9.85 million. Vanguard Extended Market Index Fu holds 0.91% of the stake in FMTX, owning 437,212 shares worth 5.86 million.

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 Jun 29, 2022, FMTX reported revenue of $0.00 and operating income of -$53.00M. Over the past year, revenue came in at $0.00 while operating income stood at -$191.12M. It generated -$52.58M net income for the quarter, which came to -$190.16M over the last twelve months. The EBITDA in the recently reported quarter was -$52.28M and diluted EPS was -$1.10. EBITDA for the full year was -$188.56M.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for FMTX since 6 analysts follow the stock currently. There are 1 analysts who recommend BUY ratings, while 0 suggest SELL ratings. Of the remaining analysts, 5 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 FMTX analysts setting a high price target of $23.00 and a low target of $20.00, the average target price over the next 12 months is $20.60. Based on these targets, FMTX could surge 15.46% to reach the target high and rise by 0.4% to reach the target low. Reaching the average price target will result in a growth of 3.41% 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. FMTX will report FY 2022 earnings on 03/28/2023. Analysts have provided yearly estimates in a range of -$4.09 being high and -$4.31 being low. For FMTX, this leads to a yearly average estimate of -$4.20. The earnings surprise of a firm occurs when the actual results change from the consensus earnings estimate. Forma Therapeutics Holdings Inc. surprised analysts by -$0.11 when it reported -$1.10 EPS against a consensus estimate of -$0.99. The surprise factor in the prior quarter was $0.15. Based on analyst estimates, the high estimate for the next quarter is -$1.02 and the low estimate is -$1.12. The average estimate for the next quarter is thus -$1.08.

Summary of Insider Activity:

Insiders traded FMTX stock several times over the past three months with 1 Buys and 0 Sells. In these transactions, 79,000 shares were bought while 0 shares were sold. The number of buy transactions has increased to 18 while that of sell transactions has risen to 7 over the past year. The total number of shares bought during that period was 416,447 while 45,637 shares were sold.

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