Verastem (NASDAQ:VSTM) Shares Up 7.1% - Still a Buy?

Key Points

• Verastem shares rose 7.1% to $8.56 in midday trading, though volume was about 90% below the average session level.
• Analyst sentiment remains positive, with a consensus “Moderate Buy” rating and an average price target of $13.83, implying substantial upside from the trading price.
• The company beat quarterly expectations, reporting an adjusted loss of $0.35 per share versus the estimated $0.43 loss and revenue of $40.08 million versus the $22.88 million forecast, but it continues to post steep losses and negative profitability metrics.

Verastem, Inc. (NASDAQ:VSTM - Get Free Report) was up 7.1% during mid-day trading on Tuesday . The stock traded as high as $8.31 and last traded at $8.56. Approximately 218,604 shares traded hands during trading, a decline of 90% from the average session volume of 2,235,085 shares. The stock had previously closed at $7.99.

Analyst Ratings Changes

Several research analysts have recently commented on VSTM shares. Weiss Ratings upgraded Verastem from a "sell (e+)" rating to a "sell (d-)" rating in a research report on Friday, September 4th. Royal Bank Of Canada set a $14.00 price target on Verastem and gave the company an "outperform" rating in a research report on Tuesday, July 7th. Wolfe Research initiated coverage on Verastem in a research note on Thursday, September 17th. They set an "outperform" rating on the stock. HC Wainwright reaffirmed a "buy" rating and issued a $18.00 price objective on shares of Verastem in a report on Friday, September 11th. Finally, Jefferies Financial Group decreased their price objective on shares of Verastem from $15.00 to $8.00 and set a "buy" rating for the company in a report on Tuesday, June 23rd. One research analyst has rated the stock with a Strong Buy rating, eight have issued a Buy rating, one has given a Hold rating and one has assigned a Sell rating to the stock. According to MarketBeat, Verastem currently has a consensus rating of "Moderate Buy" and a consensus price target of $13.83.

Verastem Stock Up 5.3%

The company has a debt-to-equity ratio of 1.48, a current ratio of 2.25 and a quick ratio of 2.22. The stock's fifty day simple moving average is $6.84 and its 200-day simple moving average is $5.64. The stock has a market cap of $762.06 million, a P/E ratio of -3.16 and a beta of 0.32.

Verastem (NASDAQ:VSTM - Get Free Report) last posted its earnings results on Thursday, August 6th. The biopharmaceutical company reported ($0.35) EPS for the quarter, beating the consensus estimate of ($0.43) by $0.08. The company had revenue of $40.08 million during the quarter, compared to analyst estimates of $22.88 million. Verastem had a negative return on equity of 467.49% and a negative net margin of 231.59%. On average, research analysts anticipate that Verastem, Inc. will post -1.56 earnings per share for the current year.

Institutional Investors Weigh In On Verastem

Large investors have recently added to or reduced their stakes in the stock. Armistice Capital LLC boosted its holdings in shares of Verastem by 68.7% during the fourth quarter. Armistice Capital LLC now owns 3,536,000 shares of the biopharmaceutical company's stock valued at $27,298,000 after acquiring an additional 1,440,000 shares during the period. Foresite Capital Management VI LLC increased its holdings in shares of Verastem by 19.9% in the 4th quarter. Foresite Capital Management VI LLC now owns 3,135,120 shares of the biopharmaceutical company's stock worth $24,203,000 after acquiring an additional 520,000 shares during the period. AIGH Capital Management LLC bought a new stake in Verastem in the 1st quarter valued at about $10,600,000. Opaleye Management Inc. bought a new stake in Verastem in the 2nd quarter valued at about $6,876,000. Finally, NEXTBio Capital Management LP acquired a new position in Verastem during the 4th quarter valued at about $10,093,000. 88.37% of the stock is owned by institutional investors and hedge funds.

About Verastem

Verastem Oncology is a biopharmaceutical company focused on developing and commercializing targeted therapies for cancers driven by abnormalities in the RAS/MAPK signaling pathway. The company's research is aimed at addressing cancers with limited treatment options, including ovarian cancer and other solid tumors.

Verastem's principal products include avutometinib, a RAF/MEK pathway inhibitor, and defactinib, a focal adhesion kinase (FAK) inhibitor. The company has studied these therapies both individually and in combination, with the goal of improving cancer-cell response and overcoming treatment resistance.

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