Is Allakos Inc. (ALLK) positioned for future growth?

Allakos Inc. (NASDAQ: ALLK) stock fell -4.78% on Monday to $7.37 against a previous-day closing price of $7.74. With 0.81 million shares changed hands, the volume of the stock remained lighter than its average volume of 1.09 million shares. During the session, the Biotechnology company that operates in wider Healthcare sector, reached to the highest price of $7.72 whereas the lowest price it dropped to was $7.32. The 52-week range on ALLK shows that it touched its highest point at $8.73 and its lowest point at $2.54 during that stretch. It currently has a 1-year price target of $6.83. Beta for the stock currently stands at 0.48.

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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 ALLK was down-trending over the past week, with a drop of -6.94%, but this was up by 5.74% over a month. Three-month performance surged to 23.45% while six-month performance rose 90.93%. The stock gained 2.65% in the past year, while it has lost -12.47% so far this year. A look at the trailing 12-month EPS for ALLK yields -6.76 with Next year EPS estimates of -2.02. For the next quarter, that number is -0.57. This implies an EPS growth rate of -61.70% for this year and 60.80% for next year. EPS is expected to grow by 29.50% annually over the next five years; however, over the past five years, the company experienced an annual growth rate of -64.00%.

Float and Shares Shorts:

At present, 85.20 million ALLK shares are outstanding with a float of 80.95 million shares on hand for trading. On Oct 13, 2022, short shares totaled 3.28 million, which was 3.87% higher than short shares on Sep 14, 2022. In addition to Dr. Robert Alexander Ph.D. as the firm’s CEO & Director, Dr. Adam L. Tomasi Ph.D. serves as its Pres & COO.

Institutional Ownership:

Through their ownership of 79.98% of ALLK’s outstanding shares, institutional investors have majority control over the company. Other institutions hold 37.08% of ALLK, in contrast to 34.13% held by mutual funds. Shares owned by individuals account for 14.85%. As the largest shareholder in ALLK with 6.97% of the stake, Logos Global Management LP holds 5,936,666 shares worth 5,936,666. A second-largest stockholder of ALLK, BVF Partners LP, holds 5,006,921 shares, controlling over 5.88% of the firm’s shares. Deep Track Capital LP is the third largest shareholder in ALLK, holding 4,518,575 shares or 5.30% stake. With a 3.77% stake in ALLK, the SPDR S&P Biotech ETF is the largest stakeholder. A total of 3,213,480 shares are owned by the mutual fund manager. The Vanguard Total Stock Market Index, which owns about 2.13% of ALLK stock, is the second-largest Mutual Fund holder. It holds 1,814,261 shares valued at 15.28 million. Vanguard Extended Market Index Fu holds 1.14% of the stake in ALLK, owning 972,869 shares worth 8.19 million.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for ALLK since 10 analysts follow the stock currently. There are 2 analysts who recommend BUY ratings, while 1 suggest SELL ratings. Of the remaining analysts, 6 believe that the stock is worth HOLDING, 0 give it an OVERWEIGHT rating, and 1 thinks that it’s UNDERWEIGHT. In the same way, a target price assigned to a stock can also reveal much about its potential. With ALLK analysts setting a high price target of $20.00 and a low target of $4.00, the average target price over the next 12 months is $7.63. Based on these targets, ALLK could surge 171.37% to reach the target high and fall by -45.73% to reach the target low. Reaching the average price target will result in a growth of 3.53% 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. ALLK will report FY 2022 earnings on 02/28/2024. Analysts have provided yearly estimates in a range of -$4.59 being high and -$5.74 being low. For ALLK, this leads to a yearly average estimate of -$5.09. The earnings surprise of a firm occurs when the actual results change from the consensus earnings estimate. Allakos Inc. surprised analysts by $0.22 when it reported -$0.53 EPS against a consensus estimate of -$0.75. The surprise factor in the prior quarter was -$0.13. Based on analyst estimates, the high estimate for the next quarter is -$0.33 and the low estimate is -$0.82. The average estimate for the next quarter is thus -$0.50.

Summary of Insider Activity:

Insiders traded ALLK stock several times over the past three months with 0 Buys and 4 Sells. In these transactions, 0 shares were bought while 33,641 shares were sold. The number of buy transactions has increased to 8 while that of sell transactions has risen to 17 over the past year. The total number of shares bought during that period was 5,768,118 while 80,973 shares were sold.

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