Please ensure Javascript is enabled for purposes of website accessibility

Why Veru Stock Blasted Higher on Friday

By Eric Volkman – Aug 27, 2021 at 4:25PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

An analyst argues that the company has far more value than many realize.

What happened

A glowing research note was the catalyst behind the bull run on Veru (VERU 1.81%) shares on Friday. The biotech's stock closed nearly 14% higher on that fresh blast of optimism.

So what

The note was authored by Veru bull Leland Gershell of Oppenheimer. In a research note made public Friday morning, the analyst strongly reiterated his buy rating on the stock, along with his $26-per-share price target -- which is nearly three times its current level.

A researcher studying a sample in a petri dish.

Image source: Getty Images.

Although Gershell is optimistic about the biotech company's pipeline -- notably its impressive VERU-111 that could potentially treat both prostate cancer and COVID-19 -- he finds larger potential elsewhere. Essentially, he's arguing that due to the stock's low valuation investors are getting several Veru development programs for free.

"While most would likely agree that the sources of greatest potential value for Veru are its late-stage candidates for breast and prostate cancer, pieces of the story not to be ignored are the commercial FC2 business as well as Tadfin, on track to launch for [benign prostatic hyperplasia] by early 2022," he wrote.

The key product of Veru's business unit, The Female Health Company, is the FC2 female condom. Tadfin is a pipeline drug that targets prostate and urinary tract afflictions in men.

Now what

Since most eyes watching Veru are tracking the progress of VERU-111, it's good to get a reminder that the company's fate isn't entirely tied to that program. Gershell's argument is a valid one, and it's clearly landing with investors.

Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Veru, Inc Stock Quote
Veru, Inc
VERU
$5.61 (1.81%) $0.10
Oppenheimer Holdings Stock Quote
Oppenheimer Holdings
OPY
$41.03 (0.69%) $0.28

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
360%
 
S&P 500 Returns
118%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 11/26/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.