Sorrento Therapeutics (NASDAQ:SRNE) shares are rallying over the last three months, thanks to the company’s smart business strategies and advancements in its pipeline. Its shares spiked more than 20% in Monday trade and its volume doubled compared to the daily average, supported by the report that it acquired 1.8 million shares of common stock. The company also announced to buy up 261,438 shares from a third party, for the price of $6.40/share.
The company’s strategy of buying its shares at $6.40 per share represents its confidence in the cash generation potential. Moreover, this move shows the company’s shares are no less than $6.40 per share.
Sorrento stock soared more than 103% in the last month alone, up 128% in the last three months. Today’s rally allowed SRNE stock to hit the new 52-week high of $8.05 a share before moving back to $7.70 per share at the time of writing. Sorrento stock has the 52-week trading range of $1.50-$8.05.
The company’s shares are rising following the news of the expected presentation at NobleCon14 – Noble Capital Markets’ Fourteenth Annual Investor Conference on Monday.
Sorrento Therapeutics appears in a solid financial position to support the share price momentum. In the latest quarter, it generated revenue of $122 million, compared to the revenue of only $2 million in the past year quarter. Its earnings increased to $0.44 per share in the third quarter of 2017, relative to earnings of $0.22 per share in the past year quarter.
Its cash and debt position has also been stabilizing with the growth in earnings. Its debt to equity ratio stands at 0.2, sharply lower from the industry average of 0.7.
Analysts are also making bullish bets amid the February 28 FDA’s action date for its resubmitted marketing application for ZTlido. Trading around 4 times to the book ratio and 3 times to sales, the stock looks significantly undervalued when compared to the industry average of 7.3 times to sales and 7.1 times to book ratio.
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