Why Clovis Oncology Is Poised to Plunge

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, biopharmaceutical company Clovis Oncology (Nasdaq: CLVS  ) has received a distressing two-star ranking.

With that in mind, let's take a closer look at Clovis and see what CAPS investors are saying about the stock right now.

Clovis facts

Headquarters (founded)

Boulder, Colo. (2009)

Market Cap

$399.4 million

Industry

Biotechnology

Trailing-12-Month EBITDA

($62.6 million)

Management

CEO Patrick Mahaffy (since 2009)
CFO Erle Mast (since 2009)

Trailing-12-Month Return on Equity

(72.9%)

Cash/Debt

$162.5 million / $0

Competitors

Immunomedics (Nasdaq: IMMU  )
Lorus Therapeutics
Threshold Pharmaceuticals (Nasdaq: THLD  )

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 23% of the 22 members who have rated Clovis believe the stock will underperform the S&P 500 going forward.

Just yesterday, one of those Fools, All-Star zzlangerhans, tapped the stock's recent run as particularly unsustainable:

[$400M] isn't an outrageous market cap for a company with [$163M] in cash and two early stage oncology candidates. The thing is, Clovis had the same valuation in August when topline results of their pivotal trial of their lead oncology candidate were still pending. Even though the share price ran up ahead of the crash when the trial failed and development of the lead candidate was terminated, it doesn't make sense for the stock to be running up again so quickly. I think the [S]treet is still showing overconfidence in this management team.

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