Boston, MA 04/03/2014 (wallstreetpr) – The stock of drug developer VIVUS, Inc. (NASDAQ:VVUS) got a hit from analysts at Piper Jaffray. Are analysts right on the stock? We take a look into this company and let you known and then decide how best to play it now that investors are heading for the exit door following the downgrade, but before then, first things first.
The company announced that its management team will present at an upcoming event in New York on April 8, starting 3:40 p.m. The company’s executives will seize the moment at the 13th Annual Needham Healthcare to provide an overview of the company. The event will take place at Westin Grand Central Hotel.
With a downgrade already served, the presentation which the executives deliver at the conference will either serve to repair the damage or deteriorate the situation.
Bearish sentiments
VIVUS, Inc. (NASDAQ:VVUS) has been going down for some time and Wall Street has been keeping track of this trend. So, while it was disappointing that the stock suffered a downgrade at the hands of analysts at Piper Jaffray, it was not surprising that more analysts were becoming bearish about the future of the stock.
At Piper Jaffray, the stock was reduced to “underweight,” suggesting that the road ahead may be full of trouble for the company in trying to make decent earnings per share and achieve compelling stock price performance.
Year-to-date, the stock has tumbled almost 32 percent and has also underperformed the S&P 500 Index in the past two months. With just two rating firms considering VIVUS, Inc. (NASDAQ:VVUS) a buy, many analysts have reduced it to hold and sell positions. The big number of short positions in the stock doesn’t make things any better.
Any hope?
Analyst sentiment often time offer the basis on how investors trade a stock. But sometimes stocks defy analyst views and end up performing above or below expectation. Can VIVUS, Inc. (NASDAQ:VVUS) be such a stock? The company has two commercial products on the market, namely Stendra and Qsymia. Stendra is an erectile dysfunction treatment, while Qsymia is targeted at chronic obesity.
During its launch, Qsymia was expected to be a blockbuster given the huge opportunity in the market it serves. As of last year, the drug returned about $24 million in sales. That was way below its potential. The struggle of Qsymia may be due to inadequate marketing and strategic deals to boost sales. It thus goes that surprises are possible if the management can focus more on drug promotion and strategic sales partnerships. In which case, beating analyst expectation is possible.
