No one could ignore Versus Systems's price drop during morning trading session, as the stock fell to $0.53, logging a -6.0% underperformance of the S&P 500. The stock is still trading within range of its average target price of $0.51, which may prove to be a resistance point to further declines. Analysts have given the Software stock target prices ranging from 0.51 to 0.51 dollars per share, with an average rating of hold.
It seems the market sentiment regarding Versus Systems is mostly optimistic, since it has a short interest of only 1.4%. This is the percentage of the share float that is being shorted by investors who are hoping the stock's price will decrease in the future.
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.
One way to tell how the market is perceiving a stock is to look to its rate of institutional ownership. With their vast resources, hedge funds, pension funds, and wealth managers are able to perform due diligence to a level that most investors cannot. So it follows that their investment decisions may be more educated. But we also know that bankers and portfolio managers can make mistakes too.
So the fact that Versus Systems has a low rate of institutional ownership at 8.0% is not an immediate red flag. It just means that something about the company has kept institutional investors from committing -- or the stock is simply flying under their radar.
Overall, there is negative market sentiment towards Versus Systems because of an analyst consensus of little upside potential, a hold rating, a very low short interest, and a very small number of institutional investors. Investors should not base their decisions on market sentiment only, they should also be aware of a stock's fundamentals before committing.
At a glance, here are some essential statistics you may want to know about VS:
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It has trailing 12 month earnings per share (EPS) of $-8.77 per share
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Versus Systems has a trailing 12 month Price to Earnings (P/E) ratio of -0.1 while the S&P 500 average is 15.97
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The company has a Price to Book (P/B) ratio of 0.35 in contrast to the S&P 500's average ratio of 2.95
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Versus Systems is a Technology company, and the sector average P/E and P/B ratios are 27.16 and 6.23 respectively
