Verastem (NASDAQ:VSTM) Shares Break Below 50 Day Moving Average - Time to Sell?

Key Points

• Verastem shares slipped below their 50-day moving average, trading as low as $8.41 and last at $8.44, versus a 50-day average of $8.48.
• The company reported a quarterly loss of $0.74 per share, wider than analysts’ $0.47 loss estimate; revenue of $24.01 million also fell short of the $26.57 million forecast.
• Despite one recent downgrade to Sell, analyst consensus remains Moderate Buy, with a consensus price target of $16.83.

Verastem, Inc. (NASDAQ:VSTM - Get Free Report) shares crossed below its 50 day moving average during trading on Thursday. The stock has a 50 day moving average of $8.48 and traded as low as $8.41. Verastem shares last traded at $8.44, with a volume of 2,086,552 shares changing hands.

Analyst Ratings Changes

Several research analysts recently weighed in on the stock. Benchmark restated a "buy" rating on shares of Verastem in a research report on Friday, October 16th. Wall Street Zen lowered shares of Verastem from a "hold" rating to a "sell" rating in a research report on Saturday, November 7th. Citigroup reiterated a "buy" rating on shares of Verastem in a research report on Thursday, October 8th. Guggenheim set a $12.00 price target on shares of Verastem and gave the stock a "buy" rating in a research note on Friday, August 7th. Finally, Mizuho increased their price target on shares of Verastem from $13.00 to $14.00 and gave the stock an "outperform" rating in a report on Friday, October 16th. Eleven research analysts have rated the stock with a Buy rating, one has issued a Hold rating and one has issued a Sell rating to the stock. According to MarketBeat.com, the stock presently has a consensus rating of "Moderate Buy" and a consensus price target of $16.83.

Verastem Price Performance

The company has a current ratio of 1.93, a quick ratio of 2.22 and a debt-to-equity ratio of 11.19. The stock has a market capitalization of $764.33 million, a PE ratio of -4.12 and a beta of 0.45. The business has a fifty day moving average price of $8.48 and a 200-day moving average price of $6.29.

Verastem (NASDAQ:VSTM - Get Free Report) last announced its quarterly earnings data on Thursday, November 5th. The biopharmaceutical company reported ($0.74) earnings per share for the quarter, missing analysts' consensus estimates of ($0.47) by ($0.27). The firm had revenue of $24.01 million for the quarter, compared to analysts' expectations of $26.57 million. Verastem had a negative net margin of 178.38% and a negative return on equity of 359.49%. Research analysts expect that Verastem, Inc. will post -1.72 EPS for the current fiscal year.

Insider Buying and Selling

In other Verastem news, CEO Dan Paterson sold 44,121 shares of Verastem stock in a transaction that occurred on Thursday, October 1st. The shares were sold at an average price of $8.00, for a total transaction of $352,968.00. Following the transaction, the chief executive officer directly owned 652,712 shares of the company's stock, valued at approximately $5,221,696. This trade represents a 6.33% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the SEC, which can be accessed through this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders have sold 48,041 shares of company stock worth $386,390 in the last quarter. 1.94% of the stock is owned by company insiders.

Institutional Investors Weigh In On Verastem

A number of institutional investors have recently made changes to their positions in VSTM. Simplicity Wealth LLC bought a new position in shares of Verastem during the 3rd quarter valued at $89,000. Commonwealth Equity Services LLC bought a new stake in Verastem in the third quarter worth $122,000. Aries Wealth Management lifted its stake in Verastem by 6.5% in the third quarter. Aries Wealth Management now owns 32,833 shares of the biopharmaceutical company's stock worth $264,000 after purchasing an additional 2,000 shares during the last quarter. Hsbc Holdings PLC purchased a new stake in Verastem during the first quarter valued at about $210,000. Finally, Russell Investments Group Ltd. boosted its position in Verastem by 92.2% during the third quarter. Russell Investments Group Ltd. now owns 56,851 shares of the biopharmaceutical company's stock valued at $458,000 after buying an additional 27,273 shares during the period. Hedge funds and other institutional investors own 88.37% of the company's stock.

About Verastem

Verastem, Inc. is a biopharmaceutical company focused on developing and commercializing medicines for cancer. Its research has centered on signaling pathways involved in tumor growth, including the RAS/MAPK pathway. The company's product, AVMAPKI FAKZYNJA CO-PACK, combines avutometinib and defactinib. The U.S. Food and Drug Administration approved the combination for certain adults with KRAS-mutated recurrent low-grade serous ovarian cancer who have received prior systemic therapy. Verastem is based in Needham, Massachusetts, and also develops investigational cancer therapies, including potential uses of avutometinib in combination with other medicines.

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