Is Evelo Biosciences (USA Stocks:EVLO) volatility declining?
 | By Rifka Kats | Macroaxis Story |
In the midst of a turbulent market, Evelo Biosciences, Inc., a clinical-stage biotechnology company, has demonstrated remarkable resilience and potential for investment. With a focus on developing oral medicines that act on immune cells in the small intestine with systemic effects, Evelo Biosciences has made significant strides in the biotechnology industry. The company's lead product candidate, EDP1815, has completed a Phase 2 trial for the treatment of psoriasis and is currently in a Phase 2 clinical trial for the treatment of atopic. This progress has contributed to the company's impressive market valuation of $11.73 billion. Despite the company's potential, analysts have a mixed view on the stock. The analyst overall consensus is a 'Hold', with 2 holds and 1 strong buy. The estimated target price ranges from a low of $2 to a high of $10, with an average target price of $6. However, the company's real value is estimated at $6.72, which is higher than the average analyst target price. This discrepancy suggests that the stock may be undervalued, presenting a potential investment opportunity. Furthermore, the naive expected forecast value for Evelo Biosciences is $12.69, indicating a potential upside. The possible upside price is a staggering $30.37, while the possible downside price is a mere $0.12. In conclusion, despite the market downturn, Evelo Biosciences has outperformed expectations, showcasing strong potential for investment. Investors should keep a close eye on this stock as it continues to navigate the volatile biotechnology industry. Most stocks are considered less risky than Evelo Biosciences, and the majority of traded equity instruments are projected to yield higher returns than the company over a 60-day investment horizon. While many risk-averse investors may be overwhelmed by the complexity of analyzing the biotechnology sector, it is worthwhile to review Evelo Biosciences. We will assess whether the current volatility of Evelo Biosciences will persist into September.
Macroaxis uses a strict editorial review process to publish stories and blog posts. Our publishers support our company and may receive a small commission when the partner links or references are utilized. Commissions do not affect the opinions or evaluations of our editorial team. The information our editors and media partners deliver is confidential and licensed for your sole use as a Macroaxis user. We reserve all rights to the content of this article, and therefore copying or distributing this story in whole or in part is strictly prohibited.
Reviewed by Gabriel Shpitalnik
Evelo Biosciences, a notable player in the Biotechnology industry, has been showcasing strong potential for investment, particularly amidst the recent market downturn. Despite the turbulent market conditions, the company has managed to outperform, exhibiting a price percent change of 6.64 and a last price of $11.73. From a volatility viewpoint, Evelo Biosciences has a high coefficient of variation of 516.78, indicating a higher level of risk and potential return. However, the company's risk-adjusted performance stands at 0.1374, suggesting that the returns have adequately compensated for the risk involved. Additionally, the firm's Jensen Alpha, a measure of the excess return or risk-adjusted performance, is at 3.35, further underlining the company's strong performance in a volatile market.
Additional examination
Evelo Biosciences currently has $51.14 million in liabilities with a Debt to Equity (D/E) ratio of 1.55. This ratio is approximately average when compared to similar companies. The company's current ratio stands at 4.44, suggesting that it maintains sufficient liquidity to meet its financial obligations when they are due. Debt can be beneficial for Evelo Biosciences until such time as it faces difficulties in paying it off, either with new capital or with free cash flow. There is a risk that shareholders of Evelo Biosciences could end up with nothing if the company fails to meet its legal debt repayment obligations. However, a more common scenario is for companies like Evelo Biosciences to issue additional shares at discount prices, thereby diluting the holdings of existing shareholders. In such cases, debt can be a more effective tool for Evelo to invest in growth at high rates of return. When considering Evelo Biosciences' use of debt, it should always be evaluated in conjunction with cash and equity. Evelo Biosciences has a performance score of 16 on a scale from zero to one hundred. The company's Beta (market volatility) is 0.4352, indicating potential diversification benefits within a portfolio. As market returns increase, Evelo Biosciences' returns are expected to increase less than the market. Conversely, during a bear market, the losses on holding Evelo Biosciences are expected to be smaller. While it's important to consider Evelo Biosciences' historical returns, it's also prudent to take into account the current trending patterns of the company's equity. Our approach to predicting a stock's future potential involves not only examining its past charts but also the entire business, including all available fundamental and technical indicators. To assess whether Evelo Biosciences' expected return of 3.75 will be sustainable in the future, we have identified twenty-one different technical indicators. These can help determine if the expected returns are sustainable. Use Evelo Biosciences' variance, as well as the relationship between the value at risk and skewness, to analyze the company's future returns.Volatility is a rate at which the price of Evelo Biosciences or any other equity instrument increases or decreases for a given set of returns. It is measured by calculating the standard deviation of the annualized returns over a given period of time and shows the range to which the price of Evelo Biosciences may increase or decrease. In other words, similar to Evelo's beta indicator, it measures the risk of Evelo Biosciences and helps estimate the fluctuations that may happen in a short period of time. So if prices of Evelo Biosciences fluctuate rapidly in a short time span, it is termed to have high volatility, and if it swings slowly in a more extended period, it is understood to have low volatility. Please read more on our technical analysis page.
How important is Evelo Biosciences's Liquidity
Evelo Biosciences financial leverage refers to using borrowed capital as a funding source to finance Evelo Biosciences ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Evelo Biosciences financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Financial leverage can amplify the potential profits to Evelo Biosciences' owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if the firm cannot cover its debt costs. The degree of Evelo Biosciences' financial leverage can be measured in several ways, including by ratios such as the debt-to-equity ratio (total debt / total equity), equity multiplier (total assets / total equity), or the debt ratio (total debt / total assets). Please check the breakdown between Evelo Biosciences's total debt and its cash.
An Additional Perspective On Evelo Biosciences
Net Loss for the year was (114.53 M) with profit before overhead, payroll, taxes, and interest of 0. Evelo Biosciences, a clinical-stage biotechnology company, has been outperforming amidst a turbulent market, showcasing strong potential for investment. Despite the company's high probability of bankruptcy at 95.70%, it has demonstrated resilience with a Market Risk Adjusted Performance of 7.76. The company's potential upside is impressive at 44.58, indicating significant room for growth. Evelo's current valuation stands at 67.35M, with a market capitalization of 220.4M. The firm's financial health is further indicated by a current ratio of 4.53X, suggesting it is well-positioned to meet its short-term obligations.The company's total assets amount to 64.44M, with current liabilities at a manageable 4.32M. The company's stock volatility is evident, with a standard deviation of 17.47 and a downside deviation of 11.87. However, the Information Ratio of 0.1904 and Sortino Ratio of 0.2803 indicate that the company's returns have outperformed its peers on a risk-adjusted basis. Evelo Biosciences, with 66 employees, is making strides in the biotechnology industry, focusing on developing oral medicines with systemic effects. Despite its risks, Evelo's performance and potential make it a compelling consideration for investors willing to weather market volatility. .
Building efficient market-beating portfolios requires time, education, and a lot of computing power!
The Portfolio Architect is an AI-driven system that provides multiple benefits to our users by leveraging cutting-edge machine learning algorithms, statistical analysis, and predictive modeling to automate the process of asset selection and portfolio construction, saving time and reducing human error for individual and institutional investors.
Try AI Portfolio ArchitectEditorial Staff
This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Rifka Kats do not own shares of Evelo Biosciences. Please refer to our Terms of Use for any information regarding our disclosure principles.