Verastem (VSTM) Upgraded to Buy: Here's What You Should Know

Core Viewpoint - Verastem (VSTM) has received an upgrade to a Zacks Rank 2 (Buy), indicating a positive shift in earnings estimates which is a significant factor influencing stock prices [1][2]. Earnings Estimates and Stock Price Movement - The Zacks rating system highlights the strong correlation between changes in earnings estimates and near-term stock price movements, making it a valuable tool for investors [2][3]. - Institutional investors utilize earnings estimates to determine the fair value of stocks, leading to price movements based on their buying or selling actions [3]. Business Improvement Indicators - The upgrade in earnings estimates for Verastem suggests an improvement in the company's underlying business, which could lead to an increase in stock price as investors respond positively [4]. Importance of Earnings Estimate Revisions - Empirical research supports the idea that tracking earnings estimate revisions can be beneficial for investment decisions, with the Zacks Rank system effectively leveraging this information [5]. Zacks Rank System Overview - The Zacks Rank system categorizes stocks into five groups based on earnings estimates, with a strong historical performance, particularly for Zacks Rank 1 stocks which have averaged a +25% annual return since 1988 [6]. Specifics on Verastem's Earnings Estimates - For the fiscal year ending December 2025, Verastem is projected to earn -$3.11 per share, unchanged from the previous year, but the Zacks Consensus Estimate has increased by 6% over the past three months [7]. Conclusion on Zacks Rating - The upgrade to Zacks Rank 2 places Verastem in the top 20% of Zacks-covered stocks, indicating a strong potential for market-beating returns in the near term [9].