Value
6.6/10data confidence 50%| Component | Sub-score |
|---|---|
| P/E | 8.9 |
| P/S | 0.0 |
| Fwd P/E | 8.0 |
- ▸Forward P/E: 15.0x
OMER · Why this verdict
Why Omeros (OMER) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
Show full disclosure ▾Hide full disclosure ▴
About TrendMatrix. TrendMatrix is a publisher of general securities research and market commentary. We publish on a regular schedule. All content is the same for every subscriber in a tier — we do not provide personalized investment advice and we do not take into account any individual subscriber's financial situation, investment objectives, risk tolerance, tax situation, or holdings.
Not investment advice. TrendMatrix is not a registered investment adviser. Our content is for informational and educational purposes only. Consult your own licensed investment adviser, broker, or tax professional before making any investment decision.
Conflicts and positions. The TrendMatrix editorial team frequently holds personal long-term positions in securities discussed. We disclose positions held at the time of publication on each piece. We maintain a trading-window policy: we do not initiate or close positions in the same direction as a TrendMatrix publication within 24 hours before or 72 hours after publication.
No paid promotion. TrendMatrix does not accept payment from any issuer, broker, or third party in exchange for coverage of any security. Our sole compensation is subscription revenue.
No fiduciary duty. No fiduciary, advisory, or agency relationship is created between you and TrendMatrix by reading our content or subscribing to our service.
Performance. Past performance is not indicative of future results. Performance figures reflect the published model only and do not reflect any individual subscriber's actual results.
VerdictSELL
Overall score5.8/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
Omeros shows excellent cash conversion and a perfect 4-quarter earnings beat streak, but a weak Piotroski score, a steep drawdown, and heavy bearish options positioning reflect the binary risk inherent to a speculative biotech name.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Omeros shows excellent cash conversion at 210% of FCF-to-net-income, despite a weak Piotroski F-Score of 2/9 and no identified competitive moat. Quality breakdown | FCF-to-net-income conversion stays above 150% while the Piotroski score improves to 4/9 or higher. | ↓Deteriorating |
| CounterA weak Piotroski score of 2/9 signals broad fundamental deterioration that a single strong cash-conversion metric cannot offset in a capital-intensive biotech. | ||
The stock shows distribution with falling on-balance volume even though it remains in a pullback within an uptrend, with the 200-day MA still rising 9.7% over 30 days. Momentum breakdown | On-balance volume turns back to accumulation while the MA continues rising. | ↓Deteriorating |
| CounterFalling on-balance volume during a pullback can be an early warning of a full trend reversal rather than a temporary dip in an uptrend. | ||
The stock is classified as speculative due to a 47% drawdown from its 52-week high combined with the binary risk inherent to the biotechnology industry. Suitability rationale | The drawdown from the 52-week high narrows to less than 30%. | ↓Deteriorating |
| CounterBinary biotech outcomes such as trial results or regulatory decisions can move the stock sharply in either direction, and a further adverse catalyst could deepen the drawdown rather than narrow it. | ||
High short interest of 26% is described as justified, and the stock trades above its options max pain level of $4 with elevated implied volatility of 98%. Risk breakdown | Short interest declines below 15% of float as bearish positioning unwinds. | →Stable |
| CounterJustified high short interest combined with elevated implied volatility can precede continued downside if the bearish thesis behind the shorting plays out. | ||
Omeros has beaten earnings estimates in all of the last 4 quarters with an average surprise of 189%, a striking positive signal despite the broader risk flags. Earnings | The beat streak extends to at least 5 consecutive quarters. | ↑Improving |
| CounterA biotech company beating low or negative EPS estimates by a large percentage margin is often a function of a small, easily-exceeded estimate base rather than genuine operating strength. | ||
Omeros shows excellent cash conversion at 210% of FCF-to-net-income, despite a weak Piotroski F-Score of 2/9 and no identified competitive moat.
↓DeterioratingQuality breakdown
- Expectation
- FCF-to-net-income conversion stays above 150% while the Piotroski score improves to 4/9 or higher.
CounterA weak Piotroski score of 2/9 signals broad fundamental deterioration that a single strong cash-conversion metric cannot offset in a capital-intensive biotech.
The stock shows distribution with falling on-balance volume even though it remains in a pullback within an uptrend, with the 200-day MA still rising 9.7% over 30 days.
↓DeterioratingMomentum breakdown
- Expectation
- On-balance volume turns back to accumulation while the MA continues rising.
CounterFalling on-balance volume during a pullback can be an early warning of a full trend reversal rather than a temporary dip in an uptrend.
The stock is classified as speculative due to a 47% drawdown from its 52-week high combined with the binary risk inherent to the biotechnology industry.
↓DeterioratingSuitability rationale
- Expectation
- The drawdown from the 52-week high narrows to less than 30%.
CounterBinary biotech outcomes such as trial results or regulatory decisions can move the stock sharply in either direction, and a further adverse catalyst could deepen the drawdown rather than narrow it.
High short interest of 26% is described as justified, and the stock trades above its options max pain level of $4 with elevated implied volatility of 98%.
→StableRisk breakdown
- Expectation
- Short interest declines below 15% of float as bearish positioning unwinds.
CounterJustified high short interest combined with elevated implied volatility can precede continued downside if the bearish thesis behind the shorting plays out.
Omeros has beaten earnings estimates in all of the last 4 quarters with an average surprise of 189%, a striking positive signal despite the broader risk flags.
↑ImprovingEarnings
- Expectation
- The beat streak extends to at least 5 consecutive quarters.
CounterA biotech company beating low or negative EPS estimates by a large percentage margin is often a function of a small, easily-exceeded estimate base rather than genuine operating strength.
Per-dimension breakdown
Quality
4.3/10data confidence 100%| Component | Sub-score |
|---|---|
| ROA | 0.0 |
| Gross margin | 3.7 |
| Op margin | 0.1 |
| Current ratio | 6.9 |
| FCF quality | 9.9 |
| Moat | 5.2 |
| Piotroski F | 4.4 |
- ▸Excellent cash conversion: 147% FCF/NI
- ▸No competitive moat
Growth
5.0/10data confidence 50%Momentum
7.6/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 3.5 |
| MACD | 10.0 |
| OBV | 10.0 |
| MA position | 9.0 |
| Volume | 5.3 |
- ▸Overbought (RSI 91)
- ▸Volume accumulation (rising OBV)
- ▸Above 200-day MA
Sentiment
7.1/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 6.3 |
| Analyst rating | 5.6 |
| Price target | 9.9 |
- ▸Light analyst coverage (1.0) — signal dampened
- ▸Analyst upside: 79%
Insider
6.9/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 8.7 |
| notable moves | 7.0 |
- ▸Insider selling (low materiality) — $87,039 (0.007% of mkt cap)
- ▸Institutions accumulating
Peer rank
6.1/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 4.6 |
| quality rank | 10.0 |
| growth rank | 5.0 |
- ▸Best-in-class margins
Technical
3.4/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 0.3 |
| support resistance | 0.5 |
| 52w position | 9.5 |
Risk (lower is worse)
1.9/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 0.0 |
| days to cover | 0.0 |
| volatility | 0.0 |
| put call | 10.0 |
| implied vol | 0.0 |
| beta | 1.5 |
- ▸High short interest: 22%
- ▸High IV: 92%
- ▸Concentration risks: 3 HIGH (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
7.6/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 10.0 |
| news activity | 8.0 |
- ▸Perfect beat streak: 4Q
How the verdict was assembled
Engine trigger
Extreme risk factors.
Engine technical detail
verdict_path:
L1:HARD_BLOCK:RISK_FLOORPassed (8)
- MOMENTUM:7.6>=5.5
- ASYMMETRY:3.5>=1.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:85d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (0)
none
Warning (0)
none
Reward-to-Risk
3.50
Upside
+52.5%
Downside
15.0%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeNo clear edge — No clear edge identified
SuitabilitySpeculative — Binary industry: Biotechnology
Investment implication
The SELL_IF_HOLDING verdict reflects clean gate clearance against Momentum at 7.6 and asymmetric R:R of 3.50.
The strongest dimensions are Momentum at 7.6, Catalyst at 7.6, and Sentiment at 7.1; the weakest are Risk (lower is worse) at 1.9, Technical at 3.4, and Quality at 4.3. The V9 engine cleared all gates, producing an asymmetric reward-to-risk of 3.50 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Excellent Cash Conversion
Trip ifFCF-to-net-income conversion falls below 100% from the current 210%.
- P2Momentum Distribution Warning
Trip ifOn-balance volume stays negative for more than 60 consecutive days while the 30-day MA slope turns negative.
- P3Speculative Binary Biotech Risk
Trip ifThe drawdown from the 52-week high exceeds 60% from the current 47%.
- P4High Short Interest Hedging
Trip ifShort interest rises above 35% of float from the current 26%.
- P5Perfect Earnings Beat Streak
Trip ifThe company's earnings surprise falls below 0% for 2 consecutive quarters, ending the current 4-quarter beat streak.