A Pair of Stock To Put On Your Watchlist: Zuora Inc. (ZUO), Rhythm Pharmaceuticals Inc. (RYTM)

Zuora Inc. (NYSE: ZUO) shares are -6.07% down in the year-to-date (YTD) period and have moved 3.70% or $0.48 higher in the latest trading session. However, stock’s trailing 12-month performance remains nearly +116.75% lower. Comparatively, the stock is -18.42% down YTD and 9.79% over the trailing 3-month period. If we look at the shorter duration, its week performance is 16.13% and 18.38% over the month.

Analyst Recommendations

On May 22, 2020, Canaccord Genuity recommended the ZUO stock is a Buy, while earlier, Northland Capital had Initiated the stock as a Market Perform on June 16, 2020. 6 analysts offering the recommendations for the stock have a consensus rating of 2.90 to suggest that the ZUO stock is a “Moderate Buy. 2 of the 6 analysts rate the stock as a “Sell”, while 0 has rated it as “Underweight”. 1 recommend buying, with 0 rating it as an Overweight.

The stock currently trades at $13.46 and analysts tracking its performance over the next 12 months have a consensus estimate price target of $13.75. The forecasts give the Zuora Inc. stock a price target range of $19.00 on the higher side while at least one analyst think the stock could plunge to a low of $11.00. The two limits represent an upside potential of 29.16% or -22.36%.

Earnings Forecast

Analysts estimate the earnings to increase 40.00% in the current quarter to -$0.07, up from the -$0.09 reported in the same quarter a year ago. For the current year, earnings should grow to an average of -$0.22, up 8.10% from -$0.34 reported last year. Analysts also offered guidance for the next financial quarter, with their average projected EPS at between -$0.06 and -$0.04. Wall Street estimates earnings per share to be at an average of -$0.1 for the next year.

Insider Transactions Summary

According to SEC data, total insider shares purchases at the company stands at 28 over the last 12 months, while SEC filings reveal that there have been 25 insider sales over the same period. Insiders have purchases 5,037,704 shares while those sold by company executives and officers stand at 3,285,067. The last 3 months have seen insiders trade a total of 3,258,835 and 3,084,457 in purchases and sales respectively.

Traube Robert J., a Chief Revenue Officer at the company, sold 2,288 shares worth $27628.0 at $12.08 per share on Jul 01. The SVP, Technology had earlier sold another 2,289 ZUO shares valued at $27639.0 on Jul 01. The shares were sold at $12.07 per share. Pileggi Jennifer (SVP, GC and Corp. Secretary) sold 2,563 shares at $12.07 per share on Jul 01 for a total of $30948.0 while Sloat Tyler, (Chief Financial Officer) sold 1,037 shares on Apr 02 for $7498.0 with each share fetching $7.23.

Rhythm Pharmaceuticals Inc. (NASDAQ:RYTM), on the other hand, is trading around $26.97 with a market cap of $1.02B and analyst research firms have a positive stance on its shares. Analysts predict that the stock will reach $32.88 and spell out a more modest performance – a 17.97% return. Some analysts are even forecasting -$3.03 per share in earnings this year on a short term (1 year) basis.

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

Company balance sheet and cash flow

RYTM’s operating expenses over the recent quarter were at -$31.12 million. This represented a 197.49% of the company’s total revenues which amounted $31.92 million. With this in place, we can see that the company’s diluted EPS declined -$0.71 on the year-over-year period, shrinking to -$1.24 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 $243.49 million from $273.76 million over the previous quarter. Short term investments amounted to $169.53 million while total current assets were at $237.82 million. The cash flow from operating activities totaled -$65.83 million, significantly lower than the -$56.92 million reported in the year-ago quarter. The company’s free cash flow for the quarter was -$65.83 million.

Insider activity

Insiders have transacted a total of 38 times at Rhythm Pharmaceuticals Inc. over the last 6 months, with insider purchases undertaken 4 times and accounting for 25,342 shares. Insider sales totaled 649,647 shares over the same period, with these deals completed in 34 transactions. Looking at these numbers, we realize that net purchases over that period are -30.0 shares. Insiders now hold a total of 2.97M shares after the latest sales, with -20.00% net shares purchased.

Major holders

Insiders own 1.40% of the company shares, while shares held by institutions stand at 95.80% with a share float percentage of 41.16M. Investors are also buoyed by the number of investors in a company, with Rhythm Pharmaceuticals Inc. having a total of 149 institutions that hold shares in the company. The top two institutional holders are RA Capital Management, L.P. with over 5.21 million shares worth more than $116.18 million. As of Jun 29, 2020, RA Capital Management, L.P. held 11.81% of shares outstanding.

The other major institutional holder is NEA Management Company, LLC, with the investment firm holding over 4.91 million shares as of Jun 29, 2020. The firm’s total holdings are worth over $109.54 million and represent 11.13% of shares outstanding.