Scholar Rock (NASDAQ:SRRK) Shares Gap Down After Earnings Miss

Key Points

• Shares of Scholar Rock (SRRK) gapped down from $36.98 to $31.99 following a disappointing earnings report, with an earnings per share of ($0.98) compared to analysts' expectations of ($0.68).
• Despite the earnings miss, several analysts, including Wedbush and Raymond James, have maintained positive ratings on the stock, with target prices of up to $53.00.
• Recent insider trading shows significant selling activity, with directors selling shares at an average price of $29.72, which raises concerns about insider confidence in the company.

Scholar Rock Holding Corporation (NASDAQ:SRRK - Get Free Report)'s share price gapped down before the market opened on Wednesday following a weaker than expected earnings announcement. The stock had previously closed at $36.98, but opened at $31.99. Scholar Rock shares last traded at $33.75, with a volume of 1,325,527 shares trading hands.

The company reported ($0.98) EPS for the quarter, missing analysts' consensus estimates of ($0.66) by ($0.32). During the same quarter last year, the firm earned ($0.60) EPS.

Analysts Set New Price Targets

A number of research analysts have commented on SRRK shares. Raymond James Financial set a $53.00 target price on shares of Scholar Rock and gave the company a "strong-buy" rating in a research report on Wednesday, July 30th. Lifesci Capital raised shares of Scholar Rock to a "strong-buy" rating in a research report on Tuesday, June 3rd. Wedbush reaffirmed an "outperform" rating and issued a $50.00 price objective on shares of Scholar Rock in a research report on Wednesday, June 18th. BMO Capital Markets cut their price objective on shares of Scholar Rock from $57.00 to $45.00 and set an "outperform" rating on the stock in a research report on Thursday. Finally, Cantor Fitzgerald started coverage on shares of Scholar Rock in a research report on Thursday, July 17th. They issued an "overweight" rating on the stock. Seven analysts have rated the stock with a buy rating and two have given a strong buy rating to the company. According to data from MarketBeat, the stock currently has an average rating of "Buy" and an average target price of $45.14.

Insider Transactions at Scholar Rock

In other Scholar Rock news, Director Jeffrey S. Flier sold 20,316 shares of the business's stock in a transaction that occurred on Monday, June 23rd. The shares were sold at an average price of $32.24, for a total transaction of $654,987.84. Following the sale, the director owned 24,070 shares of the company's stock, valued at approximately $776,016.80. The trade was a 45.77% decrease in their position. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is available at this link. Also, insider Akshay Vaishnaw sold 6,750 shares of the business's stock in a transaction that occurred on Thursday, May 29th. The stock was sold at an average price of $29.72, for a total transaction of $200,610.00. Following the sale, the insider directly owned 616,205 shares in the company, valued at approximately $18,313,612.60. This represents a 1.08% decrease in their position. The disclosure for this sale can be found here. Over the last 90 days, insiders have sold 93,654 shares of company stock worth $3,101,811. 13.30% of the stock is owned by corporate insiders.

Institutional Trading of Scholar Rock

Large investors have recently bought and sold shares of the stock. CWM LLC grew its position in Scholar Rock by 152.8% during the 1st quarter. CWM LLC now owns 996 shares of the company's stock worth $32,000 after purchasing an additional 602 shares during the last quarter. GF Fund Management CO. LTD. purchased a new stake in Scholar Rock during the 4th quarter worth approximately $85,000. Federated Hermes Inc. purchased a new stake in Scholar Rock during the 1st quarter worth approximately $71,000. Strs Ohio purchased a new stake in Scholar Rock during the 1st quarter worth approximately $77,000. Finally, Mirae Asset Global Investments Co. Ltd. grew its position in Scholar Rock by 15.8% during the 2nd quarter. Mirae Asset Global Investments Co. Ltd. now owns 3,668 shares of the company's stock worth $130,000 after purchasing an additional 500 shares during the last quarter. Hedge funds and other institutional investors own 91.08% of the company's stock.

Scholar Rock Stock Performance

The company has a debt-to-equity ratio of 0.21, a quick ratio of 10.25 and a current ratio of 6.33. The firm's 50 day simple moving average is $35.74 and its 200 day simple moving average is $34.45. The firm has a market capitalization of $3.03 billion, a price-to-earnings ratio of -10.98 and a beta of 0.48.

About Scholar Rock

Scholar Rock Holding Corporation, a biopharmaceutical company, focuses on the discovery, development, and delivery of medicines for the treatment of serious diseases in which signaling by protein growth factors plays a fundamental role. The company develops Apitegromab, an inhibitor of the activation of myostatin that is in Phase 3 clinical trial for the treatment of spinal muscular atrophy; and SRK-181, which has completed Phase 1 clinical trials for the treatment of cancers that are resistant to checkpoint inhibitor therapies, such as anti-PD-1 or anti-PD-L1 antibody therapies.