Roth Capital analyst Jotin Marango reiterated a Buy rating on Verastem (VSTM) today and set a price target of $14. The company’s shares closed yesterday at $5.72.
Marango said:
“We reiterate our Buy rating and $14 PT. Current market value in perspective. The company exited 3Q with $145.6M in cash, which in October was supplemented with $145.1M in net proceeds from an offering of convertible notes. When subtracting the recent $22M milestone paid to Infinity, the remaining cash balance suggests an EV of $153M. Qualitatively, we believe that this is low for a company with a newly approved drug in CLL and FL. Quantitatively, this valuation would not even be appropriate for the PI3K inhibitor Zydelig, which we view as a handicapped commercial asset. In the last two years between 2Q16 and 2Q18 (following the issuance of its label black box in 1Q16), Zydelig has recorded an average quarterly revenue of $37.8M (range $33M-$41M), translating to an annual run rate of $151M.”
According to TipRanks.com, Marango is a 1-star analyst with an average return of -2.0% and a 32.8% success rate. Marango covers the Healthcare sector, focusing on stocks such as KalVista Pharmaceuticals Inc, Stemline Therapeutics Inc, and Cyclacel Pharmaceuticals.
Verastem has an analyst consensus of Strong Buy, with a price target consensus of $15.25, representing a 166.6% upside. In a report issued on November 7, Oppenheimer also assigned a Buy rating to the stock with a $15 price target.
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The company has a one-year high of $10.35 and a one-year low of $2.77. Currently, Verastem has an average volume of 3.2M.
Based on the recent corporate insider activity of 13 insiders, corporate insider sentiment is positive on the stock. This means that over the past quarter there has been an increase of insiders buying their shares of VSTM in relation to earlier this year.
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Verastem, Inc. is a biopharmaceutical company, which engages in the development and commercialization of drugs to treat cancer by the targeted killing of cancer stem cells. Its product candidates include duvelisib, which targets the Phosphoinositide 3-kinase signaling pathway; and defactinib, a targeted inhibitor of the Focal Adhesion Kinase signaling pathway. It evaluates these compounds in both preclinical and clinical studies as potential therapies for certain cancers, including leukemia, lymphoma, lung cancer, ovarian cancer, mesothelioma, and pancreatic cancer. The company was founded by Richard H. Aldrich, Michelle Dipp, Piyush Gupta, Satish Jindal, Eric S. Lander, Robert F. Weinberg and Christoph H. Westphal on August 4, 2010 and is headquartered in Cambridge, MA.
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