Are These Stocks Nearing A Big Breakout? – Kadmon Holdings Inc. (KDMN), Zoom Video Communications Inc. (ZM)

Kadmon Holdings Inc. (NYSE: KDMN) shares are 1.10% up in the year-to-date (YTD) period and have moved -8.40% or -$0.42 lower in the latest trading session. However, stock’s trailing 12-month performance remains nearly +99.13% lower. Comparatively, the stock is -16.73% down YTD and 6.26% over the trailing 3-month period. If we look at the shorter duration, its week performance is -1.93% and 16.84% over the month.

Analyst Recommendations

On January 10, 2020, Nomura recommended the KDMN stock is a Buy, while earlier, Raymond James had Initiated the stock as a Outperform on May 19, 2020. 5 analysts offering the recommendations for the stock have a consensus rating of 1.60 to suggest that the KDMN stock is a “Strong Buy. 0 of the 5 analysts rate the stock as a “Sell”, while 0 has rated it as “Underweight”. 4 recommend buying, with 1 rating it as an Overweight.

The stock currently trades at $4.58. The forecasts give the Kadmon Holdings Inc. stock a price target range of $25.00 on the higher side while at least one analyst think the stock could plunge to a low of $8.00. The two limits represent an upside potential of 81.68% or 42.75%.

Earnings Forecast

Analysts estimate the earnings to decrease -21.40% in the current quarter to -$0.16, up from the -$0.49 reported in the same quarter a year ago. For the current year, earnings should grow to an average of -$0.68, up 63.10% from -$0.48 reported last year. Analysts also offered guidance for the next financial quarter, with their average projected EPS at between -$0.17 and -$0.15. Wall Street estimates earnings per share to be at an average of -$0.32 for the next year.

Insider Transactions Summary

According to SEC data, total insider shares purchases at the company stands at 5 over the last 12 months, while SEC filings reveal that there have been 0 insider sales over the same period. Insiders have purchases 1,530,188 shares while those sold by company executives and officers stand at 0. The last 3 months have seen insiders trade a total of 0 and 0 in purchases and sales respectively.

Schwalm Cynthia, a Director at the company, bought 31,000 shares worth $0.1 million at $3.24 per share on Mar 12. The President, CEO had earlier bought another 16,000 KDMN shares valued at $46811.0 on Mar 13. The shares were bought at $2.93 per share. Waksal Harlan (President, CEO) bought 12,600 shares at $3.96 per share on Mar 11 for a total of $49859.0 while PERCEPTIVE ADVISORS LLC, (Former 10% owner) bought 1,470,588 shares on Nov 18 for $5.0 million with each share fetching $3.40.

Zoom Video Communications Inc. (NASDAQ:ZM), on the other hand, is trading around $457.69 with a market cap of $127.14B and analyst research firms have a positive stance on its shares. Analysts predict that the stock will reach $234.11 and spell out a less modest performance – a -95.5% return. Some analysts are even forecasting $2.2 per share in earnings this year on a short term (1 year) basis.

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

Company balance sheet and cash flow

ZM’s operating expenses over the recent quarter were at $201.78 million. This represented a 38.51% of the company’s total revenues which amounted $328.17 million. With this in place, we can see that the company’s diluted EPS inclined $0.09 on the year-over-year period, shrinking to $0.00 as given in the last earnings report.

In terms of the balance sheet & cash flow as of (Oct 2020), the total assets figure advanced to $2.07 billion from $1.29 billion over the previous quarter. Short term investments amounted to $616.71 million while total current assets were at $1.78 billion. The cash flow from operating activities totaled $258.96 million, significantly higher than the $22.24 million reported in the year-ago quarter. The company’s free cash flow for the quarter was $251.69 million.

Insider activity

Insiders have transacted a total of 113 times at Zoom Video Communications Inc. over the last 6 months, with insider purchases undertaken 13 times and accounting for 823,897 shares. Insider sales totaled 949,907 shares over the same period, with these deals completed in 100 transactions. Looking at these numbers, we realize that net purchases over that period are -87.0 shares. Insiders now hold a total of 45.81M shares after the latest sales, with -280.60% net shares purchased.

Major holders

Insiders own 0.20% of the company shares, while shares held by institutions stand at 59.70% with a share float percentage of 161.27M. Investors are also buoyed by the number of investors in a company, with Zoom Video Communications Inc. having a total of 465 institutions that hold shares in the company. The top two institutional holders are Morgan Stanley with over 15.15 million shares worth more than $3.84 billion. As of Jun 29, 2020, Morgan Stanley held 8.32% of shares outstanding.

The other major institutional holder is Vanguard Group, Inc. (The), with the investment firm holding over 10.28 million shares as of Jun 29, 2020. The firm’s total holdings are worth over $2.61 billion and represent 5.64% of shares outstanding.