Is ESSA Pharma (USA Stocks:EPIX) rise feasible given current volatility?
 | By Vlad Skutelnik | Macroaxis Story |
Despite a modest market downturn, ESSA Pharma, a prominent player in the Biotechnology sector of the Healthcare industry, saw its stock surge over 10% on the NASDAQ exchange. This volatility comes as a surprise given the company's current fiscal year-end estimated loss of $0.69 per share and a projected loss of $1 per share for the next year. However, analysts remain optimistic, with four strong buy recommendations and an overall consensus rating of 'Strong Buy'. The estimated target price stands at $19.4, with the highest and lowest estimates being $27 and $15 respectively. Despite the real value being pegged at $8.17, significantly lower than the market value of $4.59, the stock's performance defies its valuation hype value of $4.58. This suggests a potential upside, making ESSA Pharma a stock to watch. Approximately 48% of stocks exhibit less volatility than ESSA Pharma, and it is projected that 84% of all traded equity instruments will yield higher returns than the company over a 60-day investment horizon. While many risk-takers are increasingly drawn to the biotechnology sector, some investors remain unsatisfied with the current volatility of ESSA Pharma's stock. We will explore the potential for ESSA Pharma's ongoing volatility to persist through November.
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Reviewed by Rifka Kats
ESSA Pharma currently holds liabilities amounting to 209.83K, with a Debt to Equity (D/E) ratio of 0.0. This could suggest that ESSA Pharma is not leveraging borrowing adequately. The company's current ratio stands at 42.56, indicating that it has sufficient liquidity to meet its financial obligations as they come due. While debt can support ESSA Pharma's operations until repayment becomes an issue, it is worth noting that if the company fails to meet its legal debt repayment obligations, shareholders could potentially lose their entire investment. However, a more common scenario is companies like ESSA Pharma issuing additional shares at discounted prices, thereby diluting the value of existing shares. In such cases, debt can be an effective tool for ESSA to invest in growth opportunities that offer high returns. When evaluating ESSA Pharma's use of debt, it's crucial to consider it in conjunction with the company's cash and equity positions.
On a performance scale of 0 to 100, ESSA Pharma scores 11. The company exhibits a Beta (market volatility) of 0.1329, suggesting relatively minor fluctuations in comparison to the market. This means that as market returns increase, ESSA Pharma's returns are expected to increase at a slower rate. Conversely, during a bear market, the losses incurred from holding ESSA Pharma shares are expected to be smaller. Therefore, potential investors should utilize ESSA Pharma's variance and potential upside metrics to make informed decisions about whether ESSA Pharma's price patterns will reverse.
Detailed examination of ESSA Stock
ESSA Pharma's stock (NASDAQ: EPIX) has seen a significant surge, with a price percent change of 10.87%, defying a modest market downturn. The stock opened at $4.14 and reached a high of $4.87, with a trading volume of 1.4 million shares. Despite this positive price movement, potential investors should be aware of the stock's high volatility, as indicated by a Coefficient of Variation of 574.01 and a Variance of 30.81. Moreover, the company's risk-adjusted performance stands at 0.1093, suggesting a higher level of risk compared to the potential return. Lastly, ESSA Pharma is expected to report a loss of $1 per share for the next fiscal year, which could impact the stock's future performance. Volatility is a rate at which the price of ESSA Pharma 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 ESSA Pharma may increase or decrease. In other words, similar to ESSA's beta indicator, it measures the risk of ESSA Pharma and helps estimate the fluctuations that may happen in a short period of time. So if prices of ESSA Pharma 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 ESSA Pharma's Liquidity
ESSA Pharma financial leverage refers to using borrowed capital as a funding source to finance ESSA Pharma ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. ESSA Pharma 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 ESSA Pharma'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 ESSA Pharma'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 ESSA Pharma's total debt and its cash.
ESSA Pharma Gross Profit
ESSA Pharma Gross Profit growth is one of the most critical measures in evaluating the company. The Gross Profit growth rate is calculated simply by comparing ESSA Pharma previous period's values with its current period's values. Each time period you're measuring should be of equal lengths the increase or decrease, in a company's Gross Profit between two periods. Here we show ESSA Pharma Gross Profit growth over the last 10 years. Please check ESSA Pharma's gross profit and other fundamental indicators for more details.
ESSA Pharma Volatility Drivers
ESSA Pharma unsystematic risk is unique to ESSA Pharma and usually not directly affected by the market or economic environment. An example of unsystematic risk is the possibility of poor earnings or a layoff due to coronavirus. One may mitigate nonsystematic risk by buying different securities in the same industry or by buying in different sectors. For example, if you have a position in ESSA Pharma you can also buy American Funds 2025. You can also mitigate this risk by investing in the health care sector as well as in companies having nothing to do with it. This type of risk is also called diversifiable risk and can be understood from analyzing ESSA Pharma important indicators over time. Here we run a correlation analysis between relevant fundamental ratios over at least ten year period to find a relationship in the way they react to changes in ESSA Pharma income statement and balance sheet. Here are more details about ESSA volatility.Click cells to compare fundamentals
Breaking down the case for ESSA Pharma
Net Loss for the year was (35.1 M) with profit before overhead, payroll, taxes, and interest of 0. ESSA Pharma, a NASDAQ-listed biotechnology firm, has seen its stock price surge by over 10%, defying a modest market downturn. This comes despite the company's high coefficient of variation of 574.01, indicating significant volatility. The company's risk-adjusted performance stands at 0.1093, while its market risk-adjusted performance is at 7.21, suggesting that the stock's returns have been more than compensating for the risk taken. The company's current valuation is at a modest $30.22M, with a total asset base of $169.5M. ESSA Pharma's working capital is robust at $166.75M, backed by cash and equivalents of $174.6M.The company's debt to equity ratio is almost negligible at 0.001%, indicating a strong financial position. However, the company is expected to post a loss of $1 per share next year, following an estimated loss of $0.69 per share this year. The probability of bankruptcy stands at 53.09%, which is a concern for potential investors. Despite these challenges, the company's shares are largely held by institutions, accounting for 74.74% of the total shares outstanding. The target price for the stock is set at $19.4, offering a potential upside of 10.87%. In conclusion, while ESSA Pharma's stock has shown remarkable resilience in the face of a market downturn, investors should be mindful of the company's high volatility and potential for losses. .
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