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Saturday, September 26, 2020

Verastem Inc. (NASDAQ:VSTM) is Waving the Bear Flag

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The Verastem Inc. (VSTM) shares are trading at lower $1.35 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 $4.67 and the low is $0.83. Over the last 52 weeks, VSTM is down -71.09% while the S&P 500 is down -0.36%. The catalyst for this interesting swing was the company’s recent earnings report.

A Notable Earnings Report

In the last quarter, VSTM reported a profit of $4.56 million. Verastem Inc. also saw revenues increase to $5.06 million. In addition, VSTM has free cash flow of -$34.0 million as of 03-2020. The company’s EBITDA came in at -$17.08 million which compares well with its peers.

VSTM Return on Equity (ROE) is -296.70%, and its Return on Assets is -78.00%. All told, it is clear that, VSTM 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. VSTM has a short ratio of 1.19 and outstanding shares of 158.60M.

Company Outlook

VSTM has seen increased volume after this news and investors are putting their support behind the value proposition. Furthermore, 10-day volume stands at 4.7 million and more growth is possible in the weeks ahead. Traders will also note the company’s earnings per share came in at -1.84. Verastem Inc. VSTM also noted assets of $208.15 million at the end of the last quarter. Investors should also keep an eye on sector updates as VSTM has historically followed its peers on positive news.

All told, Verastem Inc. VSTM has strung together solid data and demonstrated underlying fundamentals. At its current valuation, VSTM 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.

Verastem Inc. VSTM is now commanding a market cap of 207.40M and a float of 134.49M. VSTM 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 VSTM 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 VSTM, either long or short, and we have not been compensated for this article.

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