The Case for and Against AVEO Pharmaceuticals, Inc. (AVEO)

AVEO Pharmaceuticals, Inc. (AVEO) is an interesting player in the Healthcare space, with a focus on Biotechnology. The stock has been active on the tape, currently trading at $2.74, down from yesterday’s close by -1.79%. Given the stock’s recent action, it seemed like a good time to take a closer look at the company’s recent data.

Fundamental Analysis

AVEO Pharmaceuticals, Inc. (AVEO) currently trades with a market capitalization of $333.40 Million. That value represents a market adjusting for revenues that have been growing by 365.12 % on a quarterly year/year basis as of the company’s last quarterly report.

You can get a sense of how sustainable that is by a levered free cash flow of -$22.87 Million over the past twelve months. Generally speaking, earnings are expected to fall in coming quarters. Analysts are forecasting earnings of -$0.03 on a per share basis this quarter. Perhaps, that suggests something about why 1.98% of the outstanding share supply is held by institutional investors.

Technical Analysis

As most professionals know, technical analysis can offer critical insights into what smart money and insiders think about a stock’s prospects going forward. Looking at the stock’s movement on the chart, AVEO Pharmaceuticals, Inc. recorded a 52-week high of $4.24. It is now trading 1.5% off that level. The stock is trading $2.95 its 50-day moving average by 0.21%. The stock carved out a 52-week low down at $0.50.

In recent action, AVEO Pharmaceuticals, Inc. (AVEO) has made a move of -7.12% over the past month, which has come on weak relative transaction volume. Over the trailing year, the stock is underperforming the S&P 500 by 17.74, and it’s gotten there by action that has been more volatile on a day-to-day basis than most other stocks on the exchange. In terms of the mechanics underlying that movement, traders will want to note that the stock is trading on a float of 6.06% with $117.54 Million sitting short, betting on future declines. That suggests something of the likelihood of a short squeeze in shares of AVEO.

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