Is Emergent BioSolutions Inc. (EBS) positioned for future growth?

Emergent BioSolutions Inc. (NYSE: EBS) stock fell -3.10% on Tuesday to $13.11 against a previous-day closing price of $13.53. With 0.5 million shares changed hands, the volume of the stock remained lighter than its average volume of 1.01 million shares. During the session, the Drug Manufacturers – Specialty & Generic company that operates in wider Healthcare sector, reached to the highest price of $14.20 whereas the lowest price it dropped to was $13.03. The 52-week range on EBS shows that it touched its highest point at $47.71 and its lowest point at $10.61 during that stretch. It currently has a 1-year price target of $30.50. Beta for the stock currently stands at 0.90.

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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 EBS was down-trending over the past week, with a drop of -0.68%, but this was up by 13.90% over a month. Three-month performance dropped to -29.74% while six-month performance fell -60.52%. The stock lost -72.09% in the past year, while it has gained 11.01% so far this year. A look at the trailing 12-month EPS for EBS yields 0.82 with Next year EPS estimates of 0.77. For the next quarter, that number is 0.04. This implies an EPS growth rate of -24.70% for this year and 141.80% for next year.

Float and Shares Shorts:

At present, 49.90 million EBS shares are outstanding with a float of 44.81 million shares on hand for trading. On Oct 13, 2022, short shares totaled 2.03 million, which was 4.07% higher than short shares on Sep 14, 2022. In addition to Mr. Robert G. Kramer Sr. as the firm’s CEO, Pres & Exec. Director, Mr. Richard S. Lindahl serves as its Exec. VP, CFO & Treasurer.

Institutional Ownership:

Through their ownership of 85.79% of EBS’s outstanding shares, institutional investors have majority control over the company. Other institutions hold 58.37% of EBS, in contrast to 27.13% held by mutual funds. Shares owned by individuals account for 25.03%. As the largest shareholder in EBS with 14.92% of the stake, BlackRock Fund Advisors holds 7,445,360 shares worth 7,445,360. A second-largest stockholder of EBS, SSgA Funds Management, Inc., holds 5,817,955 shares, controlling over 11.66% of the firm’s shares. The Vanguard Group, Inc. is the third largest shareholder in EBS, holding 5,103,152 shares or 10.23% stake. With a 8.18% stake in EBS, the SPDR S&P Biotech ETF is the largest stakeholder. A total of 4,079,143 shares are owned by the mutual fund manager. The iShares Core S&P Small Cap ETF, which owns about 6.58% of EBS stock, is the second-largest Mutual Fund holder. It holds 3,284,559 shares valued at 38.79 million. Vanguard Total Stock Market Index holds 2.71% of the stake in EBS, owning 1,352,002 shares worth 15.97 million.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for EBS since 6 analysts follow the stock currently. There are 2 analysts who recommend BUY ratings, while 0 suggest SELL ratings. Of the remaining analysts, 4 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 EBS analysts setting a high price target of $55.00 and a low target of $23.00, the average target price over the next 12 months is $30.40. Based on these targets, EBS could surge 319.53% to reach the target high and rise by 75.44% to reach the target low. Reaching the average price target will result in a growth of 131.88% 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. EBS will report FY 2022 earnings on 02/23/2024. Analysts have provided yearly estimates in a range of -$1.49 being high and -$2.15 being low. For EBS, this leads to a yearly average estimate of -$1.90. The earnings surprise of a firm occurs when the actual results change from the consensus earnings estimate. Emergent BioSolutions Inc. surprised analysts by -$1.21 when it reported -$1.27 EPS against a consensus estimate of -$0.06. The surprise factor in the prior quarter was -$1.24. Based on analyst estimates, the high estimate for the next quarter is $0.45 and the low estimate is -$0.16. The average estimate for the next quarter is thus $0.04.

Summary of Insider Activity:

Insiders traded EBS stock several times over the past three months with 4 Buys and 2 Sells. In these transactions, 152,490 shares were bought while 2,328 shares were sold. The number of buy transactions has increased to 32 while that of sell transactions has risen to 24 over the past year. The total number of shares bought during that period was 552,768 while 31,104 shares were sold.

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