Why Verastem, Inc. (NASDAQ:VSTM) Could Have A Place In Your Portfolio
As an investor, I look for investments which does not compromise one fundamental factor for another. By this I mean, I look at stocks holistically, from their financial health to their future outlook. In the case of Verastem, Inc. (NASDAQ:VSTM), it is a company with strong financial health as well as a buoyant future outlook. In the following section, I expand a bit more on these key aspects. If you’re interested in understanding beyond my broad commentary, read the full report on Verastem here.
Excellent balance sheet with high growth potential
VSTM is an attractive stock for growth-seeking investors, with an expected earnings growth of 43% in the upcoming year. The optimistic bottom-line growth is supported by a similarly outstanding revenue growth over the same time period, which indicates that earnings is driven by top-line activity rather than purely unsustainable cost-reduction initiatives. VSTM is financially robust, with ample cash on hand and short-term investments to meet upcoming liabilities. This implies that VSTM manages its cash and cost levels well, which is a key determinant of the company’s health. With a debt-to-equity ratio of 23%, VSTM’s debt level is reasonable. This implies that VSTM has a healthy balance between taking advantage of low cost debt funding as well as sufficient financial flexibility without succumbing to the strict terms of debt.
Next Steps:
For Verastem, I’ve put together three key aspects you should look at:
Historical Performance: What has VSTM’s returns been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
Valuation: What is VSTM worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether VSTM is currently mispriced by the market.
Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of VSTM? Explore our interactive list of stocks with large potential to get an idea of what else is out there you may be missing!
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
