Bearish Analysts Blast Sinking Adamas Pharmaceuticals Stock

No fewer than three brokerages have downgraded ADMS stock

Mar 5, 2019 at 10:01 AM
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Adamas Pharmaceuticals Inc (NASDAQ:ADMS) stock is down sharply this morning -- last seen off 29.5% at $8.56, one of the worst stocks on the Nasdaq on early trading. Weighing on the shares is skepticism over the company's full-year forecast for Gocovri, a recently launched drug that counters side effects of certain Parkinson's disease treatments.

The company previously said it expects sales of the medicine to double, but following last night's earnings report, CEO Gregory T. Went said "results may continue to fluctuate quarter-to-quarter," and highlighted a "slowing" prescription growth rate in late 2018 that will likely continue in the near term.

Analysts have been quick to chime in, with Mizuho downgrading ADMS to "underperform" from "neutral," and slashing its price target to $5 from $11, saying it did not expect the company to "back away from prior 2019 outlook and believe[s] the launch is likely going even worse than thought." Needham and Cowen also cut their ratings on the stock to the equivalent of a "hold," while the latter halved its price target to $15 from $30.

One batch of short sellers are likely kicking rocks amid today's bear gap, with short interest plunging 20.4% in the last two reporting periods. Nevertheless, the 5.38 million shares still sold short represent a significant 26.1% of Adamas Pharmaceuticals' available float. These bearish bettors are sidelined today, with ADMS stock landing on the short-sale restricted list out of the gate.

Shorts have been in the driver's seat on ADMS for some time, though. Heading into today's trading, the stock was down 65.9% year-over-year. Plus, the equity's rally off its late-December low at $7.42 brought it right up to its 120-day moving average yesterday -- a descending trendline that hasn't been surpassed on a daily closing basis since last May.


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