Rocketing to a price of $82.4 Friday, shares of Lantheus are still -32.67% below their average target price of $122.38. Could there be more upside potential for the stock? Analysts are giving LNTH an average rating of buy and target prices ranging from $113.0 to $130.0 dollars per share.
For the greater market's outlook on the stock, we can use Lantheus's short interest as a proxy. The short interest represents the proportion of the float's shares that are tied to short positions, meaning that the investor believes the stock will decline in the future. Here, the stock's short interest is 8.9% which means the outlook is split.
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 get an idea of the market sentiment on a stock is to check its rate of institutional ownership. In the case of Lantheus, institutional investors own 101.3% of the shares. This would indicate a positive sentiment towards the stock among institutions. What does this really tell us?
Institutional investors such as hedge funds, investment firms, and wealth managers devote significant resources to identifying good investments. If they have decided to invest in LNTH, it probably means they believe it is a solid investment choice. But it could also mean they are buying up shares in an effort to acquire the company or get seats on the board of directors. Also bear in mind that institutions are fallible (just maybe not quite as fallible as the average retail investor), so they may simply be wrong when they think they've found a good stock.
In conclusion, we see mixed market sentiment regarding Lantheus because of an analyst consensus of strong upside potential, a buy rating, an above average percentage of its shares sold short, and a significant 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 LNTH:
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The stock has trailing 12 month earnings per share (EPS) of $-0.25
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Lantheus has a trailing 12 month Price to Earnings (P/E) ratio of -329.6 compared to the S&P 500 average of 15.97
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The company has a Price to Book (P/B) ratio of 12.63 in contrast to the S&P 500's average ratio of 2.95
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Lantheus is a Health Care company, and the sector average P/E and P/B ratios are 24.45 and 4.16 respectively
