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Are These Stocks Nearing A Big Breakout? – Invitae Corporation (NVTA), Chegg Inc. (CHGG)

Invitae Corporation (NYSE: NVTA) shares are 104.53% up in the year-to-date (YTD) period and have moved -1.73% or -$0.58 lower in the latest trading session. However, stock’s trailing 12-month performance remains nearly +344.91% lower. Comparatively, the stock is -9.62% down YTD and 92.70% over the trailing 3-month period. If we look at the shorter duration, its week performance is 0.21% and 4.46% over the month.

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Analyst Recommendations

On August 07, 2019, The Benchmark Company recommended the NVTA stock is a Buy, while earlier, The Benchmark Company had Downgrade the stock as a Hold on July 01, 2020. 6 analysts offering the recommendations for the stock have a consensus rating of 1.80 to suggest that the NVTA stock is a “Strong Buy. 0 of the 6 analysts rate the stock as a “Sell”, while 0 has rated it as “Underweight”. 4 recommend buying, with 0 rating it as an Overweight.

The stock currently trades at $32.99 and analysts tracking its performance over the next 12 months have a consensus estimate price target of $35.81. The forecasts give the Invitae Corporation stock a price target range of $37.25 on the higher side while at least one analyst think the stock could plunge to a low of $20.00. The two limits represent an upside potential of 11.44% or -64.95%.

Earnings Forecast

Analysts estimate the earnings to decrease -84.30% in the current quarter to -$0.69, up from the -$0.69 reported in the same quarter a year ago. For the current year, earnings should grow to an average of -$3.43, up 17.90% from -$2.28 reported last year. Analysts also offered guidance for the next financial quarter, with their average projected EPS at between -$0.65 and -$0.47. Wall Street estimates earnings per share to be at an average of -$1.63 for the next year.

Insider Transactions Summary

According to SEC data, total insider shares purchases at the company stands at 23 over the last 12 months, while SEC filings reveal that there have been 46 insider sales over the same period. Insiders have purchases 1,446,991 shares while those sold by company executives and officers stand at 462,373. The last 3 months have seen insiders trade a total of 814,800 and 171,262 in purchases and sales respectively.

WERNER ROBERT F., a Chief Accounting Officer at the company, sold 1,740 shares worth $55847.0 at $32.10 per share on Aug 19. The Chief Commercial Officer had earlier sold another 21,345 NVTA shares valued at $0.69 million on Aug 19. The shares were sold at $32.10 per share. Guyer Shelly D (Chief Financial Officer) sold 18,956 shares at $32.10 per share on Aug 19 for a total of $0.61 million while Brida Thomas, (General Counsel) sold 12,416 shares on Aug 19 for $0.4 million with each share fetching $32.10.

Chegg Inc. (NYSE:CHGG), on the other hand, is trading around $75.48 with a market cap of $9.40B and analyst research firms have a positive stance on its shares. Analysts predict that the stock will reach $94.50 and spell out a more modest performance – a 20.13% return. Some analysts are even forecasting $1.23 per share in earnings this year on a short term (1 year) basis.

Let us briefly look at the Chegg Inc. (CHGG) financials, with a focus on its operating details as indicated in its earnings report for the last quarter.

Company balance sheet and cash flow

CHGG’s operating margin was positive on the trailing 12 months basis, remaining steady at 7.40%, while the operating expenses over the recent quarter were at $87.95 million. This represented a 42.52% of the company’s total revenues which amounted $153.01 million. With this in place, we can see that the company’s diluted EPS inclined $0.08 on the year-over-year period, shrinking to -$0.02 as given in the last earnings report.

In terms of the balance sheet & cash flow as of (Sep 2020), the total assets figure advanced to $1.54 billion from $1.5 billion over the previous quarter. Short term investments amounted to $417.53 million while total current assets were at $742.14 million. The cash flow from operating activities totaled $122.2 million, significantly higher than the $47.85 million reported in the year-ago quarter. The company’s free cash flow for the quarter was $40.43 million.

Insider activity

Insiders have transacted a total of 80 times at Chegg Inc. over the last 6 months, with insider purchases undertaken 30 times and accounting for 898,982 shares. Insider sales totaled 1,306,468 shares over the same period, with these deals completed in 50 transactions. Looking at these numbers, we realize that net purchases over that period are -20.0 shares. Insiders now hold a total of 2.53M shares after the latest sales, with 18.90% net shares purchased.

Major holders

Insiders own 2.90% of the company shares with a share float percentage of 121.68M. Investors are also buoyed by the number of investors in a company, with Chegg Inc. having a total of 397 institutions that hold shares in the company. The top two institutional holders are Baillie Gifford and Company with over 14.67 million shares worth more than $986.87 million. As of Jun 29, 2020, Baillie Gifford and Company held 11.87% of shares outstanding.

The other major institutional holder is Vanguard Group, Inc. (The), with the investment firm holding over 10.48 million shares as of Jun 29, 2020. The firm’s total holdings are worth over $704.55 million and represent 8.47% of shares outstanding.

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