Short Sellers Are Betting Against This Biotech Stock at All-Time Highs, But You Should Still Add it to Your Watchlist

• Exelixis (EXEL) demonstrates strong technical momentum, recently hitting a new all-time high.
• Shares are up more than 70% over the past 52 weeks.
• EXEL maintains a 100% “Buy” technical opinion from Barchart.
• Valuation appears stretched, with Morningstar citing 24% overvaluation and high short interest at 11.19% of float, warranting caution.

Today’s Featured Stock

Valued at $16.98 billion, Exelixis (EXEL) is an oncology-focused biotechnology company, which primarily focuses on the discovery, development, and commercialization of new drugs for the treatment of historically difficult-to-treat cancers. The company has four approved drugs in its portfolio. 

What I’m Watching

I found today’s Chart of the Day by using Barchart’s powerful screening functions to sort for stocks with the highest technical buy signals and superior current momentum. I then used Barchart’s Flipcharts feature to review the charts for consistent price appreciation. EXEL checks those boxes. The Trend Seeker issued a new “Buy” signal on Sept. 2. Since that signal, EXEL is up 20.11%.

Barchart’s Technical Indicators for Exelixis

Editor’s Note: The technical indicators below are updated live during the session every 20 minutes and can therefore change each day as the market fluctuates. The indicator numbers shown below therefore may not match what you see live on the Barchart.com website when you read this report. These technical indicators form the Barchart Opinion on a particular stock.

Exelixis hit an all-time high of $73.69 on Nov. 5.

• Exelixis has a Weighted Alpha of 82.42.
• EXEL has a 100% “Buy” opinion from Barchart.
• The stock has gained 72.58% over the past 52 weeks.
• Exelixis has its Trend Seeker “Buy” signal intact.
• The stock recently traded at $71.19 with a 50-day moving average of $61.26.
• EXEL had 12 highs and gained 17.66% in the last month.
• 60-month beta of 0.45.
• Relative Strength Index (RSI) is at 69.56.
• There’s a technical support level around $68.28.

Don’t Forget the Fundamentals

• $16.98 billion market capitalization.
• 20.57x trailing price-earnings ratio.
• Revenue is expected to grow 10.14% this year and another 12.56% next year.
• Earnings are estimated to increase 21.79% this year and an additional 13.95% next year.

Analyst and Investor Sentiment on Exelixis

• Wall Street analysts followed by Barchart give the stock 7 “Strong Buy,” 12 “Hold” and 1 “Moderate Sell” opinion with price targets from $41 to $78.
• Value Line rates the stock “Highest” with price targets between $70 and $110.
• Morningstar thinks the stock is 24% overvalued with a fair value of $55.73.
• CFRA’s Market Scope rates the stock a “Hold.”
• 38,950 investors are following the stock on Seeking Alpha, which rates it a “Hold.”
• TipRanks’ analysts have a consensus price target of $60.09.
• Short interest is a high 11.19% of the float with 11.33 days to cover.

The Bottom Line on Exelixis

The company shows outstanding profitability and very strong momentum, while its valuation appears stretched and growth metrics are somewhat mixed. Although Value Line likes this stock, the high short interest should give you caution. 

Additional disclosure: The Barchart Chart of the Day highlights stocks that are experiencing exceptional current price appreciation. They are not intended to be buy recommendations as these stocks are extremely volatile and speculative. Should you decide to add one of these stocks to your investment portfolio, it is highly suggested you follow a predetermined diversification and moving stop loss discipline that is consistent with your personal investment risk tolerance. 

On the date of publication, Jim Van Meerten did not directly have a position in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.