From a fundamental perspective, Revolution Medicines (RVMD) presents a compelling investment opportunity. The company's robust Z Score of
30 indicates a low probability of bankruptcy, which is a positive sign for potential investors. Furthermore, the company's current ratio stands at
7.60X, suggesting a healthy liquidity position, as it has ample resources to meet its short-term obligations. However, it's worth noting that the company reported a free cash flow loss of
$235.2 million, indicating that it's currently spending more cash than it's generating. Despite this, the company's market capitalization of
$3.3 billion underscores its significant size within the biotechnology industry. While the company's
financial health appears to be strong, investors should consider the company's cash burn rate and the potential need for future financing.
Progressive assessment
Revolution Medicines is currently overvalued at $29.00 per share, with only modest future projections. Despite this, the stock appears to be relatively stable, considering a three-month investment horizon. Revolution Medicines maintains a Sharpe Ratio, or Efficiency, of 0.16. This suggests that the company has achieved a 0.16% return per unit of risk over the past three months.
Our approach to forecasting stock volatility involves using all available market data in conjunction with stock-specific technical indicators that cannot be diversified away. By analyzing Revolution Medicines' technical indicators, we can currently assess whether the expected return of 0.54% is justified by the implied risk.
Please consider Revolution Medicines' Risk Adjusted Performance of 0.1195, semi deviation of 1.94, and Coefficient Of Variation of 592.05 to confirm if our risk estimates align with your expectations.
Typically, a company's
financial statements are the reports that show the
financial position of the company. There are three main documents that fall into the category of financial statements. These documents include Revolution Medicines income statement, its balance sheet, and the statement of cash flows. Potential Revolution Medicines investors and stakeholders use financial statements to determine how well the company is positioned to perform in the future. Although Revolution Medicines investors may use each financial statement separately, they are all related. The changes in Revolution Medicines's assets and liabilities, for example, are also reflected in the revenues and expenses that we see on Revolution Medicines's income statement, which results in the company's gains or losses. Cash flows can provide more information regarding cash listed on a balance sheet, but not equivalent to net income shown on the income statement. Please read more on our
technical analysis and
fundamental analysis pages.
The goal of Revolution Medicines
fundamental analysis is to do accurate financial forecasts. There are several possible objectives to fundamental analysis, such as projecting of Revolution Medicines performance into the future periods or doing a reasonable stock valuation. The intrinsic value of Revolution Medicines shares is the value that is considered the true value of the share. If
the intrinsic value of Revolution is higher than its market price, buying is generally recommended. If it is equal to the market price, it is recommended to hold; and if it is less than the market price, then one should sell all shares Revolution Medicines. Please read more on our
fundamental analysis page.
How effective is Revolution Medicines in utilizing its assets?
Revolution Medicines reports assets on its Balance Sheet. It represents the amount of Revolution resources that either has an existing economic value or will provide some form of benefits in the future. By effectively utilizing its assets, Revolution Medicines aims to generate revenue, control costs, drive operational efficiency, and enhance profitability. Optimizing asset utilization helps maximize shareholder value and maintain a competitive position in the Biotechnology space. To get a better handle on how balance sheet or income statements item affect Revolution volatility, please check the breakdown of all its
fundamentals.
Are Revolution Medicines Earnings Expected to grow?
The
future earnings power of Revolution Medicines involves the interaction of many company-specific, industry, and economic forces. Earnings estimates embody investors' opinions of Revolution Medicines factors such as sales growth, product demand, competitive industry environment, profit margins, and cost controls. Revolution Medicines
stock prices adjust as these expectations change or are proven wrong. The main thing to remember is that equities with high expected earnings growth tend to underperform the market because it is usually difficult to meet the market's high expectations. Companies with low earnings expectations tend to do better than expected. Please use our latest analysis of Revolution
expected earnings.
Revolution Medicines Gross Profit
Revolution Medicines Gross Profit growth is one of the most critical measures in evaluating the company. The Gross Profit growth rate is calculated simply by comparing Revolution Medicines 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 Revolution Medicines Gross Profit growth over the last 10 years. Please check Revolution Medicines'
gross profit and other
fundamental indicators for more details.
Breaking it down
Many companies such as Revolution Medicines have both institutions investors and insiders sharing the ownership. Retail investors typically buy and sell stocks in round lots of 100 shares or more. Other other hand institutional investors are known to buy and sell in block trades of 10,000 shares or more. Let's take a look at how the ownership of Revolution is distributed among investors.
Ownership Allocation
Revolution Medicines has a total of 106.31 Million outstanding shares. The majority of Revolution Medicines
outstanding shares are owned by
third-party entities. These institutional holders are usually referred to as non-private investors looking to secure positions in Revolution Medicines to benefit from reduced commissions. Consequently, institutional investors are subject to a different set of regulations than regular investors in Revolution Medicines. Please pay attention to any change in the institutional holdings of Revolution Medicines as this could imply that something significant has changed or about to change at the company. Remember, it does not matter who owns the company or if the company is currently
losing money. If the true value of the company is more than the market pays for it currently, you can still have a good investment opportunity.
| Retail Investors | 0.0 |
| Insiders | 1.78 |
| Institutions | 98.22 |
| 2020 | 2021 | 2022 | 2023 (projected) |
Interest Expense | 71 K | 12 K | 10.8 K | 11.08 K | Gross Profit | 42.98 M | 29.39 M | 35.38 M | 39.23 M |
Asset Utilization
The asset utilization indicator refers to the revenue earned for every dollar of assets a company currently reports. Revolution Medicines has an asset utilization ratio of 4.36 percent. This indicates that the company is making $0.0436 for each dollar of assets. An increasing asset utilization means that Revolution Medicines is more efficient with each dollar of assets it utilizes for everyday operations.
| Current Assets | 533.98 Million | 72.03 |
| Assets Non Current | 136.85 Million | 18.46 |
| Goodwill | 70.45 Million | 9.5 |
Revolution Medicines (RVMD) has been experiencing a bullish surge in the market, prompting investors to question its potential as a promising investment opportunity. The biotechnology company, with a robust total asset base of
811.93M, has a net asset value of 811.93M, and a book value of 8.96X per share. Despite an operating margin of -7.91 and total operating expenses of 293.7M, the company's shares float stands at 89.7M with a substantial 98.22% owned by institutions. However, the company's
financial health reveals some concerns. Its EBITDA stands at a loss of 271.2M, and the company reported an operating income loss of 258.3M. Furthermore, the company's EPS estimate for the next quarter is -0.85, indicating potential losses. Yet, the company's strong working capital of 598.2M and total stockholder equity of 685.2M provide some financial stability. Additionally, the company's cash per share is 5.26X, and it holds a significant amount of short-term investments worth
483.5M. In conclusion, while Revolution Medicines has shown a bullish trend, potential investors should consider the company's financial losses and the risk associated with the biotechnology industry. However, its strong institutional backing and substantial assets provide a degree of security.
Will Revolution Medicines growth be viable after the surge?
Revolution Medicines, Inc. (RVMD) has recently demonstrated a potential upside of 4.25, indicating a promising future for the biotech firm. This increase in value could signal viable growth, provided the company continues to make strategic advancements in its drug development pipeline. However, investors should exercise caution and closely monitor the company's
financial health and market conditions, given the known volatility of the biotech sector. While the potential upside does suggest a positive outlook, it's essential to consider all factors before making an investment decision. Currently, Revolution Medicines exhibits a below-average downside deviation. It has an Information Ratio of 0.15 and a Jensen Alpha of 0.54. Nevertheless, we advise investors to further scrutinize Revolution Medicines' expected returns to ensure all indicators align with the current outlook about its relatively low value at risk. Understanding different
market volatility trends often assists investors in timing the market. Proper use of volatility indicators enables traders to measure Revolution Medicines' stock risk against market volatility during both bullish and bearish trends.
The heightened level of volatility that accompanies bear markets can directly impact
Revolution Medicines' stock price, adding stress to investors as they watch the value of their shares decrease. This typically compels investors to rebalance their portfolios by purchasing different stocks as prices decline. In conclusion, despite a modest market dip, Revolution Medicines (RVMD) has shown a promising ascent of over 4 percent. With a strong
analyst consensus recommending a 'Buy', the stock's potential seems robust. The valuation real value stands at
29, slightly lower than the market value of
32.78. The estimated target price is valued at 31.444, with a possible upside price of 37.49, indicating a potential for significant growth. The fiscal year-end data, coupled with a high number of strong buys (7 out of 9 estimates), further strengthens the case for investing in RVMD. However, investors should also consider the possible downside price of 30.68 and the lowest estimated target price of 23. Despite these risks, the overall outlook for Revolution Medicines stock remains positive. .
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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 Revolution Medicines. Please refer to our
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