Rocketing to a price of $15.57 during today's afternoon trading session, shares of Kala Pharmaceuticals are still -65.11% below their average target price of $44.63. Could there be more upside potential for the stock? Analysts are giving KALA an average rating of strong buy and target prices ranging from $12.0 to $87.5 dollars per share.
We can use Kala Pharmaceuticals's short interest as a proxy for determining general market sentiment regarding the stock. The short interest is the percentage of the share float that represents short positions, meaning that the investor believes the stock will decline in the future. Since KALA's short interest is 10.42%, the market sentiment is mixed on this stock.
When a stock is sold short, it means an investor has borrowed shares of the stock from their broker, and then sold them at the going market price. The investor hopes for the price to decline, so that they might buy those shares back at a lower price in the future. Once they do, they can return the borrowed shares to their broker, and keep the profit they made on the transaction.
We can make inferences about the market sentiment surrounding Kala Pharmaceuticals by analyzing its rate of institutional ownership. If institutions such as hedge funds and pension funds are the primary shareholders of a corporation, it most likely means that its shares are a good investment according to those institutions' analysts.
At 25.27%, the rate of institutional ownership is average, indicating that a sufficient number of institutions have concluded that it is a stable investment. Beware, however, that the rate of institutional ownership could also indicate an ongoing proxy battle or takeover attempt -- so you should also periodically check the news about a stock whose institutional ownership you are tracking.
In conclusion, we see negative market sentiment regarding Kala Pharmaceuticals because of an analyst consensus of strong upside potential, no average rating visible in our data, no information on the number of shares sold short, and no information on the number of institutional investors. At Market Inference, we believe that any investment decision should be preceded by an in-depth analysis of the company's fundamental values and a comparison with similar stocks.
Here's a snapshot of some important facts to keep in mind about KALA:
-
The stock has trailing 12 month earnings per share (EPS) of $-36.37
-
Kala Pharmaceuticals has a trailing 12 month Price to Earnings (P/E) ratio of -0.43 compared to the S&P 500 average of 15.97
-
The company has a Price to Book (P/B) ratio of 2.944 in contrast to the S&P 500's average ratio of 2.95
-
Kala Pharmaceuticals is a Health Care company, and the sector average P/E and P/B ratios are 24.45 and 4.16 respectively
