Exploring Strategic Opportunities: Vir Biotechnology Inc. (VIR), Lyft Inc. (LYFT)

Vir Biotechnology Inc. (NASDAQ: VIR) shares are 226.84% up in the year-to-date (YTD) period and have moved -5.86% or -$2.56 lower in the latest trading session. However, stock’s trailing 12-month performance remains nearly +242.50% lower. Comparatively, the stock is -45.20% down YTD and 20.25% over the trailing 3-month period. If we look at the shorter duration, its week performance is -20.79% and -13.42% over the month.

Analyst Recommendations

On March 19, 2020, JP Morgan recommended the VIR stock is a Underweight, while earlier, Needham had Initiated the stock as a Buy on August 20, 2020.

The stock currently trades at $41.10 and analysts tracking its performance over the next 12 months have a consensus estimate price target of $44.00. The consensus price target represents an upside potential 6.59.

Earnings Forecast

Analysts estimate the earnings to increase 56.50% in the current quarter to -$0.59, up from the -$4.6 reported in the same quarter a year ago. For the current year, earnings should grow to an average of -$2.24, up 1,283.10% from -$5.76 reported last year. Analysts also offered guidance for the next financial quarter, with their average projected EPS at between -$0.78 and -$0.23. Wall Street estimates earnings per share to be at an average of -$2.7 for the next year.

Insider Transactions Summary

According to SEC data, total insider shares purchases at the company stands at 56 over the last 12 months, while SEC filings reveal that there have been 42 insider sales over the same period. Insiders have purchases 122,041,489 shares while those sold by company executives and officers stand at 742,074. The last 3 months have seen insiders trade a total of 316,445 and 402,445 in purchases and sales respectively.

Virgin Herbert, a EVP, Research & CSO at the company, sold 7,900 shares worth $0.4 million at $51.08 per share on Aug 11. The Chief Medical Officer had earlier sold another 12,500 VIR shares valued at $0.64 million on Aug 19. The shares were sold at $50.95 per share. Pang Phillip (Chief Medical Officer) sold 12,500 shares at $50.90 per share on Aug 05 for a total of $0.64 million while Pang Phillip, (Chief Medical Officer) sold 12,500 shares on Aug 05 for $0.64 million with each share fetching $50.90.

Lyft Inc. (NASDAQ:LYFT), on the other hand, is trading around $29.70 with a market cap of $9.53B and analyst research firms have a positive stance on its shares. Analysts predict that the stock will reach $40.66 and spell out a more modest performance – a 26.96% return. Some analysts are even forecasting -$2.75 per share in earnings this year on a short term (1 year) basis.

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

Company balance sheet and cash flow

LYFT’s operating margin was negative on the trailing 12 months basis, remaining steady at -54.30%, while the operating expenses over the recent quarter were at $575.84 million. This represented a -69.69% of the company’s total revenues which amounted $339.35 million. With this in place, we can see that the company’s diluted EPS declined -$1.41 on the year-over-year period, shrinking to -$2.23 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 $5.21 billion from $5.57 billion over the previous quarter. Short term investments amounted to $1.93 billion while total current assets were at $3.1 billion. The cash flow from operating activities totaled -$958.65 million, significantly lower than the -$69.51 million reported in the year-ago quarter. The company’s free cash flow for the quarter was -$1.01 billion.

Insider activity

Insiders have transacted a total of 26 times at Lyft Inc. over the last 6 months, with insider purchases undertaken 11 times and accounting for 765,841 shares. Insider sales totaled 263,081 shares over the same period, with these deals completed in 15 transactions. Looking at these numbers, we realize that net purchases over that period are -4.0 shares. Insiders now hold a total of 82.85M shares after the latest sales, with 1.00% net shares purchased.

Major holders

Insiders own 1.60% of the company shares, while shares held by institutions stand at 69.20% with a share float percentage of 243.61M. Investors are also buoyed by the number of investors in a company, with Lyft Inc. having a total of 476 institutions that hold shares in the company. The top two institutional holders are FMR, LLC with over 44.48 million shares worth more than $1.47 billion. As of Jun 29, 2020, FMR, LLC held 14.67% of shares outstanding.

The other major institutional holder is Vanguard Group, Inc. (The), with the investment firm holding over 18.66 million shares as of Jun 29, 2020. The firm’s total holdings are worth over $615.92 million and represent 6.15% of shares outstanding.