What Can We Learn From Eargo Inc.(EAR)’s Valuation Ratios?

Eargo Inc. (NASDAQ:EAR) finished Wednesday with an addition of $0.78 to close at $7.29, an upside of 11.98 percent. An average of 1,735,840 shares of common stock have been traded in the last five days. There was a gain of $0.64 in the past week. The last 20 days have seen an average of 5,376,270 shares traded, while the 50-day average volume stands at 2,555,044.

EAR stock has decreased by -64.70% in the last month. The company shares reached their 1-month lowest point of $6.20 on 10/04/21. Shares of the company touched a low of $6.20 and a high of $76.75 in 52 weeks. In spite of this, the price is down -90.50% from the 52-week high.


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Insider Transactions

30 days have passed since Eargo Inc. (EAR) last reported insider trading activity. Richardson Nina, who is Director, most recently acquired $3,000 shares at $20.32 per share on Sep 14. In this transaction, the insider spent $60,960. Chief Financial Officer, Laponis Adam, disposed of 10,000 shares at a price of $38.43 on Jun 29. The insider now owns more than $384,300 worth of shares. Prior to that, 10% Owner Makhzoumi Mohamad went on to Sale 283 shares at $32.41 each on May 25. An amount of $9,172 was transacted.

Valuation Metrics

Eargo Inc. (EAR) has a trailing price-to-earnings (P/E) ratio of 26.30 for the broader industry and 32.30 for the sector. Other valuation ratios to consider include the trailing price-to-sales (P/S) ratio at 3.41, the price-to-book (PB) ratio at 1.61.

The quick ratio of Eargo Inc. for the three months ended June 29 was 8.10, and the current ratio was 8.20, indicating that the company is able to meet its debt obligations. Further, the company has a long term debt to equity ratio of 0.09 and a total debt to equity ratio of 0.00 for the quarter ending June 29. Eargo Inc.’s EBITDA margin for the year ending June 29 is -47.23%, while its operating margin for the same period stands at -60.40%. Its gross profit as reported stood at $47.28 million compared to revenue of $69.15 million.

For investors, determining the potential profitability of the investment also depends on the performance of the company’s management. In the past 12 months, Eargo Inc.’s return on assets was -23.50%. For the broader industry, ROE averaged 3.96 over the past year.

Earnings Surprise

The analyst consensus anticipated Eargo Inc.’s latest quarter earnings to come in at -$0.26 per share, but it turned out to be -$0.36, a -38.50% surprise. For the quarter, EBITDA amounted to -$18.37 million. Shareholders own equity worth $39.16 million.

Technical Picture

From a technical analysis perspective, let’s take a brief look at Eargo Inc. (EAR) price momentum. RSI 9-day as of the close on 13 October was 28.91%, suggesting the stock is oversold, with historical volatility in this time frame at 64.47%.

As of today, EAR’s price is $6.71 +9.62% or $0.64 from its 5-day moving average. EAR is currently trading -65.69% lower than its 20-day SMA and -77.33% lower than its 100-day SMA. However, the stock’s current price level is -79.63% below the SMA50 and -85.80% below the SMA200.

The stochastic %K and %D were 30.97% and 12.97%, respectively, and the average true range (ATR) was 0.92. With the 14-day stochastic at 78.42% and the average true range at 1.16, the RSI (14) stands at 24.79%. The stock has reached 0.14 on the 9-day MACD Oscillator while the 14-day reading was at 0.05.

Analyst Ratings

William Blair downgraded Eargo Inc. (NASDAQ: EAR) to a a Mkt perform rating in its most recent analyst report. Previously, the stock was rated as a an Outperform.The consensus rating for Eargo Inc. (EAR) among analysts is Underweight. According to current brokerage recommendations, 1 brokerage firm advise that investors sell EAR, while 2 suggest investors hold. There are 0 analysts who rate the stock as underweight. The stock is rated overweight by 0 analysts, while 0 others rate it as a “buy”.

What is EAR’s price target for the next 12 months?

Analysts predict a range of price targets between $10.00 and $11.00, with a median target of $10.50. Taking a look at these predictions, the average price target given by analysts for Eargo Inc. (EAR) stock is $10.50.

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