Tumbling to a price of $51.79 during today's morning trading session, shares of Apellis Pharmaceuticals are now -37.45% below their average target price of $82.8. Does this mean the stock will reverse course? Analysts are giving APLS an average rating of buy and target prices ranging from 60.0 to 110.0 dollars per share.
We can use Apellis 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 APLS's short interest is 10.1%, the market sentiment is mixed on this stock.
Short selling involves borrowing shares and then selling them at current market prices. In the successful version of the strategy, the shares are purchased at a lower price at some time in the future. The investor then returns the shares to the lender, and keeps the profit made on the sell/buy transaction.
Another way to gauge the sentiment on Apellis Pharmaceuticals is to look at the percentage of institutions that are invested in the stock. In this case, 96.0% of the shares are held by pension, mutual, and hedge funds, which shows that these institutions probably have strong confidence in the stock.
If institutions are invested in a particular stock, it shows in most cases that they have performed quality research and concluded that it is a good investment. In some cases, however, increases in institutional ownership could be a sign of a takeover attempt or proxy fight, which can actually injure share prices. Also, institutions are not infallible, and can certainly make miscalculations -- often with spectacular results.
Overall, there is positive market sentiment towards Apellis Pharmaceuticals 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. 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 APLS:
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It has trailing 12 month earnings per share (EPS) of $-4.45 per share
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Apellis Pharmaceuticals has a trailing 12 month Price to Earnings (P/E) ratio of -11.6 while the S&P 500 average is 15.97
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The company has a Price to Book (P/B) ratio of 31.83 in contrast to the S&P 500's average ratio of 2.95
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Apellis Pharmaceuticals is a Health Care company, and the sector average P/E and P/B ratios are 30.21 and 4.08 respectively
