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JMP Securities has maintained a positive stance on Gritstone bio (NASDAQ: GRTS), keeping a Market Outperform rating and a $5.00 price target for the company's stock.
The reaffirmation comes as Gritstone bio advances in its Phase 2 clinical trials for the GRANITE neoantigen program, which has been identified as a key driver for the company's near-term prospects.
The analyst from JMP Securities highlighted the potential of the GRANITE program, emphasizing the importance of the mature progression-free survival (PFS) data scheduled for release next month.
The recent meetings hosted by Gritstone management with investors centered on several critical aspects of the trial, including trial design, statistical analyses, and previous GRANITE results. Discussions also touched on the company's financial sustainability.
Gritstone bio's stock maintains its rating based on a risk-adjusted, discounted cash flow (DCF) analysis, which is a method used to estimate the value of an investment based on its expected future cash flows. This method of valuation supports the analyst's confidence in the company's potential and growth trajectory.
Gritstone reported a net loss of $23 million for the second quarter, with cash reserves of $62 million. TD Cowen maintained its Buy rating on Gritstone bio, following encouraging early Phase II data for colorectal cancer treatments, which showed a potential benefit in high-risk patients. Piper Sandler also maintained an Overweight rating on the company's stock, anticipating more developed data from Gritstone's GRANITE study expected in September.
Additionally, Gritstone bio held its annual stockholders meeting, resulting in the election of Elaine Jones, Ph.D., and Clare Fisher to the Board of Directors. Ernst & Young LLP was ratified as the independent registered public accounting firm for the fiscal year ending December 31, 2024. Stockholders approved the compensation of the company's named executive officers and expressed a preference for an annual advisory vote on such compensation.
InvestingPro Insights
As Gritstone bio (NASDAQ:GRTS) continues to make strides in its Phase 2 clinical trials, real-time data from InvestingPro shows a market capitalization of $59.07 million, indicating the scale at which the company is currently valued in the market. Despite the challenges, three analysts have recently revised their earnings estimates upwards for the upcoming period, reflecting some optimism in the company's financial prospects. However, it's important to note that Gritstone bio is quickly burning through cash and has been experiencing weak gross profit margins, as evidenced by a -718.3% gross profit margin for the last twelve months as of Q2 2024.
Investors should also be aware that the company's stock has faced significant pressure, with a price total return of -69.51% over the last year. This performance aligns with the InvestingPro Tip that the stock has fared poorly over the last month and has taken a big hit over the last six months. Moreover, the company does not pay a dividend, which may be a consideration for income-focused investors.
While the near-term outlook hinges on the forthcoming PFS data, the InvestingPro platform contains additional insights and tips for Gritstone bio, which can be found at https://www.investing.com/pro/GRTS. These tips could provide investors with a more comprehensive understanding of the company’s financial health and stock performance.
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