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) shares gapped down prior to trading 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) earnings per share for the quarter, missing the consensus estimate of ($0.66) by ($0.32). During the same quarter in the prior year, the company earned ($0.60) EPS.

Analyst Ratings Changes

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

Insider Activity at Scholar Rock

In related news, Director Joshua Reed sold 5,400 shares of Scholar Rock stock in a transaction dated Thursday, May 29th. The shares were sold at an average price of $29.72, for a total transaction of $160,488.00. Following the completion of the transaction, the director directly owned 15,732 shares of the company's stock, valued at approximately $467,555.04. The trade was a 25.55% decrease in their position. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is accessible through the SEC website. Also, insider Akshay Vaishnaw sold 6,750 shares of Scholar Rock stock in a transaction on Thursday, May 29th. The stock was sold at an average price of $29.72, for a total value of $200,610.00. Following the sale, the insider owned 616,205 shares of the company's stock, valued at approximately $18,313,612.60. This trade represents a 1.08% decrease in their ownership of the stock. The disclosure for this sale can be found here. Insiders sold a total of 93,654 shares of company stock valued at $3,101,811 over the last ninety days. 13.30% of the stock is currently owned by company insiders.

Institutional Investors Weigh In On Scholar Rock

Several large investors have recently added to or reduced their stakes in the stock. CWM LLC raised its stake in shares of Scholar Rock by 152.8% during the first quarter. CWM LLC now owns 996 shares of the company's stock valued at $32,000 after acquiring an additional 602 shares in the last quarter. GF Fund Management CO. LTD. purchased a new position in Scholar Rock during the 4th quarter worth $85,000. Federated Hermes Inc. bought a new stake in Scholar Rock during the 1st quarter valued at $71,000. Strs Ohio purchased a new stake in shares of Scholar Rock in the 1st quarter worth $77,000. Finally, Mirae Asset Global Investments Co. Ltd. grew its position in shares of 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 buying an additional 500 shares in the last quarter. 91.08% of the stock is owned by hedge funds and other institutional investors.

Scholar Rock Stock Up 1.4%

The firm has a market cap of $3.02 billion, a P/E ratio of -10.94 and a beta of 0.48. The company has a current ratio of 10.25, a quick ratio of 10.25 and a debt-to-equity ratio of 0.16. The business has a 50-day moving average price of $35.69 and a 200-day moving average price of $34.62.

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.