Considering the current EPS estimate for the quarter is a loss of 0.61 and the potential upside is only 6.9%, it might be prudent to hold off on buying Scholar Rock stock until there's clearer evidence of institutional support or improved financial performance. With shares short at 16.5M, indicating significant bearish sentiment, investors should approach with caution and monitor any shifts in market dynamics.
Important Points
Scholar Rock Holding's stock seems overpriced at $20.96 per share, especially given its modest future outlook. A key metric to assess how efficiently a company uses its assets is asset utilization, which measures the profit generated per dollar of assets. Unfortunately, Scholar Rock Holding has a negative asset utilization rate of -0.51%, meaning it loses $0.00512 for every dollar of assets. This suggests the company isn't using its assets effectively, which is concerning for investors. In simpler terms, Scholar Rock's current operations aren't yielding encouraging returns on its asset investments.When the tide goes out, you discover who's been swimming naked. This adage might resonate with investors eyeing Scholar Rock (NASDAQ: SRRK) as institutional interest appears to be shifting. With a significant 16.5 million shares short, the market seems to be hedging its bets on this biotechnology player. Despite a Wall Street target price of $30.57, the stock's recent performance, hovering around a typical price of $26.24, suggests a cautious outlook. Analysts are projecting an EPS loss of 0.61 for the next quarter, which could be a red flag for potential investors. While the analyst target price estimated value sits at $22.14, the possible downside price of 0.27 indicates that there might be more room for the stock to fall. As the fiscal year-end approaches in December, investors should keep a close watch on any shifts in institutional sentiment that could further impact Scholar Rock's trajectory. Currently, Scholar Rock's cash per share remains steady compared to last year. The Graham Number is anticipated to increase to 11.86, but the Free Cash Flow Yield is likely to dip to (0.1). This analysis aims to provide institutional investors with a clear forecast of Scholar Rock's prospects for November.
There are currently many different techniques concerning forecasting the market as a whole as well as
predicting future values of individual securities such as Scholar Rock Holding. Regardless of method or technology, to accurately forecast the stock market is more a matter of luck rather than a particular technique. Nevertheless, trying to predict the stock market accurately is still an essential part of the overall investment decision process. Using different forecasting techniques and comparing the results might improve your chances of accuracy even though unexpected events may often change the
market sentiment and impact your forecasting results.
Scholar Rock
financial leverage refers to using borrowed capital as a funding source to finance Scholar Rock Holding ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Scholar Rock 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 Scholar Rock's 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 Scholar Rock's 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 Scholar Rock's total debt and its cash.
Scholar Rock Holding is displaying above-average volatility over the selected time horizon. Understanding different market volatility trends often help investors to time the market. Properly using volatility indicators enable traders to measure Scholar Rock's stock risk against market volatility during both bullish and bearish trends. The higher level of volatility that comes with bear markets can directly impact Scholar Rock's stock price while adding stress to investors as they watch their shares' value plummet. This usually forces investors to rebalance their portfolios by buying different financial instruments as prices fall.
Returns Breakdown
| Return On Tangible Assets | (0.56) |
| Return On Capital Employed | (0.65) |
| Return On Assets | (0.56) |
| Return On Equity | (0.7) |
When the tide goes out, you discover who's been swimming naked. This adage seems fitting for Scholar Rock (NASDAQ: SRRK), as institutional interest appears to be holding strong, with a staggering 99.85% of shares owned by institutions. Despite a challenging environment in the biotechnology sector, Scholar Rock's robust current ratio of 9.69X suggests a solid liquidity position, which may provide a cushion against potential financial headwinds. However, with an EPS estimate of a loss of 2.33 for the current year, investors should remain cautious and consider the company's ability to navigate its financial challenges. The stock's beta of 0.82 indicates lower volatility compared to the broader market, which might appeal to risk-averse investors looking for stability in a turbulent sector..
Some Scholar technical indicators suggest recoup
Scholar Rock Holding's stock is showing signs of potential recovery, highlighted by a notable drop in its coefficient of variation to 913.4. This figure, which assesses the stock's volatility compared to its average return, indicates that price swings are becoming more stable. Reduced volatility can be encouraging for investors, suggesting a more predictable performance and possibly setting the stage for a rebound. As the market processes this change, it might be a good time for investors to reevaluate their positions and consider potential gains as the stock stabilizes.
However, it's important to note that Scholar Rock still exhibits above-average volatility, which can affect its price, especially during market downturns, prompting investors to adjust their portfolios accordingly.As we look ahead to 2024, Scholar Rock Holding presents a compelling opportunity for investors willing to embrace some risk. With an analyst overall consensus of "Strong Buy" and a possible upside price of
81.86, the stock could offer significant returns if the company successfully navigates its upcoming challenges. However, it's crucial to remain mindful of the potential downside, which could dip as low as
0.27. Balancing these factors, investors should consider their risk tolerance and long-term strategy when deciding whether to add SRRK to their portfolios..
Vlad Skutelnik is a Macroaxis Contributor. Vlad covers stocks, funds, cryptocurrencies, and ETFs that are traded in North America, focusing primarily on fundamentals, valuation and market volatility. He has many years of experience in fintech, predictive investment analytics, and risk management.
View Profile 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 Vlad Skutelnik do not own shares of Scholar Rock Holding. Please refer to our
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