Cerebras Systems (NASDAQ:CBRS) Shares Down 7.7% - Time to Sell?

Key Points

• Cerebras shares fell 7.7% to $108.94 on heavier-than-average trading volume, bringing the stock well below its 50-day moving average of $181.84.
• Analysts remain broadly bullish, with a “Moderate Buy” consensus and an average price target of $289.90, although several firms recently reduced their targets.
• The company reported a significant quarterly EPS miss of $2.98 versus the expected $0.21 loss, despite revenue rising 74.3% year over year to $209.87 million. Insiders sold approximately $387.7 million of stock over the past 90 days.

Cerebras Systems Inc. (NASDAQ:CBRS - Get Free Report) traded down 7.7% on Thursday. The company traded as low as $107.90 and last traded at $108.94. 10,709,654 shares were traded during mid-day trading, an increase of 41% from the average session volume of 7,575,882 shares. The stock had previously closed at $117.98.

Analysts Set New Price Targets

A number of analysts have recently issued reports on CBRS shares. UBS Group lifted their price objective on shares of Cerebras Systems from $320.00 to $330.00 and gave the stock a "buy" rating in a report on Thursday, August 13th. TD Cowen lowered their price target on Cerebras Systems from $275.00 to $175.00 and set a "buy" rating on the stock in a research report on Monday. Weiss Ratings raised Cerebras Systems from a "sell (d-)" rating to a "sell (d)" rating in a research note on Wednesday. Mizuho dropped their price target on Cerebras Systems from $310.00 to $300.00 and set an "outperform" rating for the company in a research note on Thursday, August 13th. Finally, Jefferies Financial Group upgraded Cerebras Systems to an "outperform" rating in a report on Monday, October 5th. Two equities research analysts have rated the stock with a Strong Buy rating, ten have assigned a Buy rating, one has issued a Hold rating and one has given a Sell rating to the company. Based on data from MarketBeat, the company has an average rating of "Moderate Buy" and an average price target of $289.90.

Cerebras Systems Stock Down 7.7%

The business has a fifty day simple moving average of $181.84. The company has a debt-to-equity ratio of 0.02, a quick ratio of 5.80 and a current ratio of 5.82. The stock has a market cap of $25.88 billion and a price-to-earnings ratio of -1,361.75.

Cerebras Systems (NASDAQ:CBRS - Get Free Report) last announced its earnings results on Wednesday, August 12th. The company reported ($2.98) earnings per share for the quarter, missing analysts' consensus estimates of ($0.21) by ($2.77). The business had revenue of $209.87 million for the quarter. The company's quarterly revenue was up 74.3% compared to the same quarter last year. On average, sell-side analysts anticipate that Cerebras Systems Inc. will post -0.52 EPS for the current fiscal year.

Insiders Place Their Bets

In other news, COO Dhiraj Mallick sold 396,000 shares of the stock in a transaction on Tuesday, September 29th. The stock was sold at an average price of $204.04, for a total value of $80,799,840.00. Following the sale, the chief operating officer directly owned 396,000 shares of the company's stock, valued at approximately $80,799,840. This represents a 50.00% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the SEC, which is accessible through this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CAO Yagnesh Patel sold 1,320 shares of the firm's stock in a transaction on Monday, September 28th. The shares were sold at an average price of $204.50, for a total value of $269,940.00. Following the transaction, the chief accounting officer owned 15,356 shares of the company's stock, valued at $3,140,302. The trade was a 7.92% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. In the last ninety days, insiders sold 1,864,452 shares of company stock valued at $387,680,754.

Institutional Trading of Cerebras Systems

Institutional investors have recently bought and sold shares of the company. Value Aligned Research Advisors LLC bought a new position in shares of Cerebras Systems in the second quarter worth approximately $241,934,000. Wellington Management Group LLP purchased a new stake in shares of Cerebras Systems during the second quarter valued at approximately $194,853,000. State Street Corp bought a new stake in shares of Cerebras Systems during the second quarter valued at approximately $105,343,000. Dragoneer Investment Group LLC bought a new stake in shares of Cerebras Systems during the second quarter valued at approximately $88,400,000. Finally, Montanova Capital LLC purchased a new position in Cerebras Systems in the 2nd quarter worth approximately $37,990,000.

Cerebras Systems Company Profile

Cerebras Systems is a technology company that develops specialized computing systems for artificial intelligence and high-performance computing. Its core product is the Wafer-Scale Engine, a processor designed to provide large-scale computing capacity and high-speed data movement for training and running AI models.

The company offers integrated AI computing systems, including the Cerebras CS series, which combines its wafer-scale processors with supporting hardware and software. Cerebras also provides access to its technology through cloud-based services, enabling businesses, research organizations and other users to develop and deploy AI applications without operating the underlying systems themselves.

Founded in 2015 and headquartered in Sunnyvale, California, Cerebras serves customers in sectors such as technology, government, scientific research and other data-intensive industries.

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