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Monday, September 21, 2020

Novan Inc. (NASDAQ:NOVN) is Gaining Momentum on Earnings Catalyst

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The Novan Inc. (NOVN) shares are trading at higher $0.62 and the avg recommendation for the stock is Moderate Buy.

To add more color to this target, the company’s high over the last year is $3.72 and the low is $0.22. Over the last 52 weeks, NOVN is down -83.47% while the S&P 500 is up 0.29%. The catalyst for this interesting swing was the company’s recent earnings report.

A Notable Earnings Report

In the last quarter, NOVN reported a profit of $7.42 million. Novan Inc. also saw revenues increase to $1.21 million. In addition, NOVN has free cash flow of -$7.79 million as of 03-2020. The company’s EBITDA came in at -$5.71 million which compares well with its peers.

NOVN Return on Equity (ROE) is 141.90%, and its Return on Assets is -79.50%. All told, it is clear that, NOVN needs to be on your watchlist.

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Of course, we must look beyond the financials and question how well those numbers represent the sustainable earnings power of the business. Investors need to know how sustainable this current run. NOVN has a short ratio of 0.19 and outstanding shares of 80.79M.

Company Outlook

NOVN has seen increased volume after this news and investors are putting their support behind the value proposition. Furthermore, 10-day volume stands at 24.25 million and more growth is possible in the weeks ahead. Traders will also note the company’s earnings per share came in at -1.07. Novan Inc. NOVN also noted assets of $36.51 million at the end of the last quarter. Investors should also keep an eye on sector updates as NOVN has historically followed its peers on positive news.

All told, Novan Inc. NOVN has strung together solid data and demonstrated underlying fundamentals. At its current valuation, NOVN represents an interesting risk/reward case. Traders should stay tuned to see if this recent report will push the stock to test recent resistance levels.

Novan Inc. NOVN is now commanding a market cap of 47.91M and a float of 59.21M. NOVN is increasing its credibility in this sector and that could lead to more upside down the line. Sign-up for continuing coverage on shares of NOVN stock, as well as other hot stock picks, get our free newsletter today and get our next breakout pick!

Disclosure: we hold no position in NOVN, either long or short, and we have not been compensated for this article.

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