Are Smart Investors Making the Right Decision? Seres Therapeutics Inc. (MCRB)

Seres Therapeutics Inc. (NASDAQ: MCRB) stock jumped 1.54% on Monday to $5.29 against a previous-day closing price of $5.21. With 0.68 million shares changed hands, the volume of the stock remained lighter than its average volume of 0.81 million shares. During the session, the Biotechnology company that operates in wider Healthcare sector, reached to the highest price of $5.32 whereas the lowest price it dropped to was $5.17. The 52-week range on MCRB shows that it touched its highest point at $9.49 and its lowest point at $2.50 during that stretch. It currently has a 1-year price target of $13.43. Beta for the stock currently stands at 2.74.

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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 MCRB was down-trending over the past week, with a drop of -3.47%, but this was down by -4.86% over a month. Three-month performance dropped to -18.74% while six-month performance rose 44.93%. The stock lost -30.58% in the past year, while it has lost -5.54% so far this year. A look at the trailing 12-month EPS for MCRB yields -2.35 with Next year EPS estimates of -0.97. For the next quarter, that number is -0.46. This implies an EPS growth rate of 36.00% for this year and 57.30% for next year.

Float and Shares Shorts:

At present, 122.53 million MCRB shares are outstanding with a float of 116.29 million shares on hand for trading. On Oct 13, 2022, short shares totaled 4.94 million, which was 3.98% higher than short shares on Sep 14, 2022. In addition to Mr. Eric D. Shaff M.B.A. as the firm’s Pres, CEO & Director, Mr. David A. Arkowitz M.B.A. serves as its Exec. VP, CFO & Head of Bus. Devel.

Institutional Ownership:

Through their ownership of 80.87% of MCRB’s outstanding shares, institutional investors have majority control over the company. Other institutions hold 45.02% of MCRB, in contrast to 20.72% held by mutual funds. Shares owned by individuals account for 18.31%. As the largest shareholder in MCRB with 14.94% of the stake, Fidelity Management & Research Co holds 18,610,733 shares worth 18,610,733. A second-largest stockholder of MCRB, Federated Global Investment Manag, holds 18,329,238 shares, controlling over 14.71% of the firm’s shares. Janus Henderson Investors US LLC is the third largest shareholder in MCRB, holding 11,149,782 shares or 8.95% stake. With a 9.62% stake in MCRB, the Federated Hermes Kaufmann Fund is the largest stakeholder. A total of 11,990,000 shares are owned by the mutual fund manager. The Federated Hermes Kaufmann Small C, which owns about 4.82% of MCRB stock, is the second-largest Mutual Fund holder. It holds 6,000,000 shares valued at 33.6 million. Fidelity Growth Company Fund holds 4.66% of the stake in MCRB, owning 5,799,376 shares worth 32.48 million.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for MCRB since 8 analysts follow the stock currently. There are 7 analysts who recommend BUY ratings, while 1 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 MCRB analysts setting a high price target of $25.00 and a low target of $4.00, the average target price over the next 12 months is $13.43. Based on these targets, MCRB could surge 372.59% to reach the target high and fall by -24.39% to reach the target low. Reaching the average price target will result in a growth of 153.88% 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. MCRB will report FY 2022 earnings on 02/27/2024. Analysts have provided yearly estimates in a range of -$1.91 being high and -$2.33 being low. For MCRB, this leads to a yearly average estimate of -$2.21. The earnings surprise of a firm occurs when the actual results change from the consensus earnings estimate. Seres Therapeutics Inc. surprised analysts by -$0.02 when it reported -$0.49 EPS against a consensus estimate of -$0.47. The surprise factor in the prior quarter was -$0.10. Based on analyst estimates, the high estimate for the next quarter is -$0.30 and the low estimate is -$0.55. The average estimate for the next quarter is thus -$0.46.

Summary of Insider Activity:

Insiders traded MCRB stock several times over the past three months with 2 Buys and 1 Sells. In these transactions, 62,500 shares were bought while 5,012 shares were sold. The number of buy transactions has increased to 15 while that of sell transactions has risen to 1 over the past year. The total number of shares bought during that period was 9,281,933 while 5,012 shares were sold.

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