A significant driver of top-line growth: Verastem Inc. (VSTM)

Verastem Inc. (NASDAQ: VSTM) stock jumped 3.39% on Tuesday to $0.61 against a previous-day closing price of $0.59. With 0.79 million shares changed hands, the volume of the stock remained lighter than its average volume of 1.17 million shares. During the session, the Biotechnology company that operates in wider Healthcare sector, reached to the highest price of $0.6300 whereas the lowest price it dropped to was $0.6050. The 52-week range on VSTM shows that it touched its highest point at $2.13 and its lowest point at $0.29 during that stretch. It currently has a 1-year price target of $4.08. Beta for the stock currently stands at 0.66.

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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 VSTM was up-trending over the past week, with a rise of 3.60%, but this was up by 64.89% over a month. Three-month performance surged to 95.48% while six-month performance fell -45.53%. The stock lost -58.78% in the past year, while it has gained 51.58% so far this year. A look at the trailing 12-month EPS for VSTM yields -0.40 with Next year EPS estimates of -0.34. For the next quarter, that number is -0.10. This implies an EPS growth rate of 7.60% for this year and 12.80% for next year. EPS is expected to grow by 1.74% annually over the next five years; however, over the past five years, the company experienced an annual growth rate of 16.20%.

Float and Shares Shorts:

At present, 210.09 million VSTM shares are outstanding with a float of 208.41 million shares on hand for trading. On Oct 13, 2022, short shares totaled 2.73 million, which was 1.30% higher than short shares on Sep 14, 2022. In addition to Mr. Brian M. Stuglik BPHARM, R.Ph., RPh as the firm’s CEO & Director, Mr. Daniel W. Paterson serves as its COO & Pres.


Institutional Ownership:

Through their ownership of 60.15% of VSTM’s outstanding shares, institutional investors have majority control over the company. Other institutions hold 7.54% of VSTM, in contrast to 44.49% held by mutual funds. Shares owned by individuals account for 25.51%. As the largest shareholder in VSTM with 12.85% of the stake, Baker Bros. Advisors LP holds 26,988,898 shares worth 26,988,898. A second-largest stockholder of VSTM, BVF Partners LP, holds 19,974,658 shares, controlling over 9.51% of the firm’s shares. Viking Global Investors LP is the third largest shareholder in VSTM, holding 9,224,000 shares or 4.39% stake. With a 2.71% stake in VSTM, the Vanguard Total Stock Market Index is the largest stakeholder. A total of 5,682,571 shares are owned by the mutual fund manager. The Vanguard Extended Market Index Fu, which owns about 1.19% of VSTM stock, is the second-largest Mutual Fund holder. It holds 2,509,284 shares valued at 1.01 million. Artisan International Small-Mid F holds 0.59% of the stake in VSTM, owning 1,246,351 shares worth 0.5 million.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for VSTM since 5 analysts follow the stock currently. There are 5 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 VSTM analysts setting a high price target of $5.50 and a low target of $3.00, the average target price over the next 12 months is $3.90. Based on these targets, VSTM could surge 801.64% to reach the target high and rise by 391.8% to reach the target low. Reaching the average price target will result in a growth of 539.34% 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. VSTM will report FY 2022 earnings on 03/25/2024. Analysts have provided yearly estimates in a range of -$0.38 being high and -$0.40 being low. For VSTM, this leads to a yearly average estimate of -$0.39. The earnings surprise of a firm occurs when the actual results change from the consensus earnings estimate. Verastem Inc. surprised analysts by $0.03 when it reported -$0.09 EPS against a consensus estimate of -$0.12. The surprise factor in the prior quarter was -$0.01. Based on analyst estimates, the high estimate for the next quarter is -$0.09 and the low estimate is -$0.10. The average estimate for the next quarter is thus -$0.10.

Summary of Insider Activity:

Insiders traded VSTM stock several times over the past three months with 0 Buys and 8 Sells. In these transactions, 0 shares were bought while 62,505 shares were sold. The number of buy transactions has increased to 3 while that of sell transactions has risen to 23 over the past year. The total number of shares bought during that period was 115,000 while 137,961 shares were sold.

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