Is Sage Therapeutics Inc. (SAGE) positioned for future growth?

Sage Therapeutics Inc. (NASDAQ: SAGE) stock jumped 5.58% on Tuesday to $45.04 against a previous-day closing price of $42.66. With 0.53 million shares changed hands, the volume of the stock remained heavier than its average volume of 0.51 million shares. During the session, the Biotechnology company that operates in wider Healthcare sector, reached to the highest price of $45.61 whereas the lowest price it dropped to was $42.20. The 52-week range on SAGE shows that it touched its highest point at $49.56 and its lowest point at $27.36 during that stretch. It currently has a 1-year price target of $55.25. Beta for the stock currently stands at 1.15.

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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 SAGE was up-trending over the past week, with a rise of 2.27%, but this was up by 13.08% over a month. Three-month performance surged to 24.52% while six-month performance rose 31.24%. The stock gained 17.87% in the past year, while it has gained 18.09% so far this year. A look at the trailing 12-month EPS for SAGE yields -8.63 with Next year EPS estimates of -8.53. For the next quarter, that number is -2.39. This implies an EPS growth rate of -168.30% for this year and 6.80% for next year. EPS is expected to grow by 41.10% annually over the next five years; however, over the past five years, the company experienced an annual growth rate of -10.50%.

Float and Shares Shorts:

At present, 59.43 million SAGE shares are outstanding with a float of 52.05 million shares on hand for trading. On Oct 13, 2022, short shares totaled 3.61 million, which was 6.07% higher than short shares on Sep 14, 2022. In addition to Mr. Barry E. Greene as the firm’s Pres, CEO & Director, Ms. Kimi E. Iguchi CPA serves as its CFO & Treasurer.

Institutional Ownership:

Through their ownership of 88.29% of SAGE’s outstanding shares, institutional investors have majority control over the company. Other institutions hold 53.54% of SAGE, in contrast to 4.48% held by mutual funds. Shares owned by individuals account for 32.34%. As the largest shareholder in SAGE with 10.62% of the stake, Fidelity Management & Research Co holds 6,317,514 shares worth 6,317,514. A second-largest stockholder of SAGE, Wellington Management Co. LLP, holds 4,932,518 shares, controlling over 8.29% of the firm’s shares. The Vanguard Group, Inc. is the third largest shareholder in SAGE, holding 4,701,620 shares or 7.90% stake. With a 4.96% stake in SAGE, the BB Biotech AG is the largest stakeholder. A total of 2,950,278 shares are owned by the mutual fund manager. The Fidelity Growth Company Fund, which owns about 3.02% of SAGE stock, is the second-largest Mutual Fund holder. It holds 1,798,480 shares valued at 68.59 million. SPDR S&P Biotech ETF holds 2.70% of the stake in SAGE, owning 1,608,188 shares worth 61.34 million.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for SAGE since 23 analysts follow the stock currently. There are 9 analysts who recommend BUY ratings, while 0 suggest SELL ratings. Of the remaining analysts, 13 believe that the stock is worth HOLDING, 1 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 SAGE analysts setting a high price target of $105.00 and a low target of $33.00, the average target price over the next 12 months is $54.90. Based on these targets, SAGE could surge 133.13% to reach the target high and fall by -26.73% to reach the target low. Reaching the average price target will result in a growth of 21.89% 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. SAGE will report FY 2022 earnings on 02/22/2024. Analysts have provided yearly estimates in a range of -$8.39 being high and -$9.20 being low. For SAGE, this leads to a yearly average estimate of -$8.89. The earnings surprise of a firm occurs when the actual results change from the consensus earnings estimate. Sage Therapeutics Inc. surprised analysts by -$0.09 when it reported -$2.31 EPS against a consensus estimate of -$2.22. The surprise factor in the prior quarter was $0.00. Based on analyst estimates, the high estimate for the next quarter is -$2.01 and the low estimate is -$2.68. The average estimate for the next quarter is thus -$2.37.

Summary of Insider Activity:

Insiders traded SAGE stock several times over the past three months with 5 Buys and 0 Sells. In these transactions, 20,406 shares were bought while 0 shares were sold. The number of buy transactions has increased to 9 while that of sell transactions has remained unmoved to 0 over the past year. The total number of shares bought during that period was 67,850 while 0 shares were sold.

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