Verastem (NASDAQ:VSTM) Announces Quarterly Earnings Results, Beats Expectations By $0.25 EPS

Key Points

• Verastem reported a quarterly earnings per share (EPS) of ($0.39), beating analysts' estimates of ($0.64), but fell short on revenue with $2.14 million compared to the expected $6.01 million.
• The company's stock traded up 19.9% after the earnings report, reaching $6.74 per share, with a market cap of $370.36 million.
• Analysts remain bullish on Verastem, with the average rating at "Moderate Buy" and a consensus target price of $13.50, although there is one sell rating among nine buy ratings.

Verastem (NASDAQ:VSTM - Get Free Report) released its quarterly earnings results on Thursday. The biopharmaceutical company reported ($0.39) EPS for the quarter, topping the consensus estimate of ($0.64) by $0.25, Zacks reports. The company had revenue of $2.14 million during the quarter, compared to the consensus estimate of $6.01 million.

Verastem Stock Down 0.8%

NASDAQ:VSTM traded down $0.07 during mid-day trading on Wednesday, hitting $8.15. 3,148,320 shares of the company's stock traded hands, compared to its average volume of 1,750,462. The company has a fifty day moving average of $5.44 and a 200 day moving average of $6.07. Verastem has a twelve month low of $2.24 and a twelve month high of $9.10. The company has a market capitalization of $501.24 million, a P/E ratio of -2.49 and a beta of 0.83. The company has a debt-to-equity ratio of 2.06, a quick ratio of 3.50 and a current ratio of 3.46.

Analyst Ratings Changes

Several research analysts have recently commented on the company. HC Wainwright boosted their price target on Verastem from $10.00 to $14.00 and gave the stock a "buy" rating in a research report on Friday, May 9th. Wall Street Zen raised Verastem from a "sell" rating to a "hold" rating in a research report on Sunday. Finally, Royal Bank Of Canada boosted their price target on Verastem from $12.00 to $13.00 and gave the stock an "outperform" rating in a research report on Friday, August 8th. One research analyst has rated the stock with a hold rating and nine have given a buy rating to the company. According to MarketBeat, the company currently has an average rating of "Moderate Buy" and a consensus target price of $13.50.

Insider Transactions at Verastem

In other news, CEO Dan Paterson sold 58,677 shares of the stock in a transaction dated Tuesday, May 20th. The stock was sold at an average price of $8.13, for a total value of $477,044.01. Following the transaction, the chief executive officer directly owned 461,982 shares of the company's stock, valued at approximately $3,755,913.66. This represents a 11.27% decrease in their ownership of the stock. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is accessible through the SEC website. Also, CFO Daniel Calkins sold 11,143 shares of the stock in a transaction dated Tuesday, May 20th. The shares were sold at an average price of $8.13, for a total value of $90,592.59. Following the completion of the transaction, the chief financial officer directly owned 114,055 shares in the company, valued at $927,267.15. This represents a 8.90% decrease in their ownership of the stock. The disclosure for this sale can be found here. Insiders sold 94,308 shares of company stock worth $694,786 over the last three months. Corporate insiders own 2.10% of the company's stock.

Institutional Inflows and Outflows

Hedge funds have recently modified their holdings of the company. Rhumbline Advisers increased its holdings in shares of Verastem by 19.2% in the second quarter. Rhumbline Advisers now owns 59,553 shares of the biopharmaceutical company's stock valued at $247,000 after purchasing an additional 9,594 shares during the period. AQR Capital Management LLC grew its holdings in Verastem by 78.2% during the first quarter. AQR Capital Management LLC now owns 62,603 shares of the biopharmaceutical company's stock worth $377,000 after acquiring an additional 27,477 shares during the period. Goldman Sachs Group Inc. grew its holdings in Verastem by 236.9% during the first quarter. Goldman Sachs Group Inc. now owns 756,402 shares of the biopharmaceutical company's stock worth $4,561,000 after acquiring an additional 531,873 shares during the period. Finally, Geode Capital Management LLC grew its holdings in Verastem by 24.9% during the second quarter. Geode Capital Management LLC now owns 1,199,259 shares of the biopharmaceutical company's stock worth $4,978,000 after acquiring an additional 238,995 shares during the period. 88.37% of the stock is owned by institutional investors and hedge funds.

About Verastem

Verastem, Inc, a development-stage biopharmaceutical company, focuses on developing and commercializing drugs for the treatment of cancer in the United States. Its product candidates are Avutometinib, an orally available small molecule RAF/MEK clamp that inhibits the ras sarcoma RAF/MEK, ERK mitogen activated pathway kinase pathway which is involved in cell proliferation, migration, transformation, and survival of tumor cells; and Defactinib, an oral small molecule inhibitor of FAK and proline-rich tyrosine kinase for various solid tumors.