Analysts Are Behind The Curve When Rating Verastem, Inc. (VSTM)

On December 03, 2019, Verastem, Inc. (NASDAQ:VSTM) shares gained 2.16% or 0.03 points to close at $1.42 with a heavy trading volume of 4.14 million shares. It opened the trading session at $1.46, the shares rose to $1.49 and dropped to $1.42, the range by which the price of stock traded the whole day. The company now has a market cap of $102 million and currently has 71.61 million outstanding shares. Verastem, Inc. (VSTM) stock has accumulated 30.28 percent of market value in 21 trading days.

VSTM stock’s trailing 3-year beta is 2.97, meaning there will be a greater rate of return, although posing a higher risk. The part of a firm’s profit given to each outstanding share of regular stock was -$1.67 share in the trailing 52 weeks. The stock’s value fallen -57.74 percent year to date (YTD) compared to a decline of -72.16 percent in 52 week’s period. The firm’s shares are still trading -73.68 percent below its 1-year high of $5.39 and 71.08 percent up from 52-week low of $0.83. The average consensus ranking on the company is 2.5, on a ranging where 5 is equal to a consensus sell rating. In other words, the mean analyst recommendations are ranking this stock as a sell.

Verastem, Inc. (VSTM) is most likely going to rise 93.66 percent in the coming 12 months, as per price target approximations compiled by finviz. Nevertheless, they have set the price target at a $3-month high price target. This represents a whopping 111.27 percent increase from the current trading of shares. The 52-week median price target given by the analysts is $2.75, which means a return possibility of 93.66 percent in comparison with the closing price of the stock of $1.42 on December 03. The lowest price set for the stock is $2.5 — just above 76.06 percent from VSTM share price now.

Past records have indicated that shares in Verastem, Inc. declined on 14 different earnings reaction days and we have yet to see whether this trend will play out and remain in place when the company reports upcoming earnings. Investors will get the next hint of VSTM’s Q4 earnings on March 11. Analysts are predicting revenue to climb 271.9 percent to $4.5M in the financial fourth quarter, while EPS will soar by about 200 percent to -$0.45 per share. In the last quarter, it earnings of -$0.52 per share came better than the -$0.535, adjusted, expected by Thomson Reuters consensus estimate. Revenue for the quarter was $1.21M, missing the $2.88M analysts had expected. Earnings are seen to rise by 36.8 percent this year, 35.9 percent in the coming year and the trend continues by 1.74 percent every year in the next 5 years.

Let’s take a glimpse at some insider activity at Verastem, Inc. (NASDAQ:VSTM) and observe the pattern. The earliest insider trade happened on 03/15/2019. BARBERICH TIMOTHY J gathered a total of 33 thousand shares of the firm at average share price of $3.21. The total amount for the purchase was set at $105.93 thousand. On completing this exchange, the Director account balance was 168 thousand shares. The stock lost -56.7 percent from that insider purchase. On 09/28/2018, Paterson Dan, COO, did a purchase of 3 thousand shares at a price of $7 per share. This increased 21 thousand shares to the insider’s fortune and the stock experienced a -80.14 percent retreat in price since the news became public. This exchange saw 77.73 thousand shares get into the COO account.

On 09/28/2018, President and CEO Forrester Robert recorded a purchase transaction valued at $14 thousand. The purchase at $7 a share has added 2 thousand shares into the insider’s portfolio position. Meanwhile, shares price witnessed -80.14 percent decrease since the transaction reporting date. The company insider is left with 226.23 thousand shares remaining in the account. Kauffman Michael, who works as Director at the company, performed a purchase of 4 thousand shares in a transaction worth $29.96 thousand. The acquisition recorded on 09/28/2018 was priced at $7.49 per share. The stock price plunged -81.44 percent since the transaction. Kauffman Michael currently holds a stake of 8 thousand in VSTM stock which is worth $11.36 thousand after the insider buying.

The stock is lingering around the initial support level of $1.4. After this, the following support is at the zone of $1.37. Up until the time the VSTM stock hit levels beyond the current one, bulls should have no alarm. In terms of its momentum, the stock’s RSI hit 73.12 on the daily chart, and this may be a cause for concern. In case the price goes below $1.37 level on closing basis, there may be more profit booking with the stock growing weaker. Still, getting to the $1.47 level may cause a pull-back move approaching $1.51 mark.

Verastem, Inc. has a 93.2% gross profit margin.