Value
9.2/10data confidence 20%| Component | Sub-score |
|---|---|
| P/E | 9.2 |
- ▸Attractively valued
OMER · Why this verdict
Why Omeros (OMER) is rated SELL
Updated
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VerdictSELL
Overall score5.9/10
ConfidenceMEDIUM
MacroNEUTRAL
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. | →Stable |
| 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. | →Stable |
| 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%. | →Stable |
| 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. | →Stable |
| 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.
→StableQuality 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.
→StableMomentum 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.
→StableSuitability 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.
→StableEarnings
- 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.
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.
Per-dimension breakdown
Quality
5.3/10data confidence 71%| Component | Sub-score |
|---|---|
| ROA | 0.0 |
| Current ratio | 10.0 |
| FCF quality | 10.0 |
| Moat | 4.5 |
| Piotroski F | 2.2 |
- ▸Excellent cash conversion: 210% FCF/NI
- ▸No competitive moat
- ▸Weak Piotroski F-Score: 2/9
Growth
5.0/10data confidence 50%Momentum
4.6/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 4.5 |
| MACD | 9.2 |
| OBV | 4.3 |
| MA position | 5.2 |
| Volume | 0.0 |
- ▸Below 200-MA but MA still rising (+9.3%/30d) — pullback in uptrend, not confirmed weakness
Sentiment
6.9/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 5.6 |
| Price target | 10.0 |
| erm sentiment | 5.0 |
- ▸Light analyst coverage (1.0) — signal dampened
- ▸Analyst upside: 217%
Insider
7.5/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 10.0 |
- ▸Insider selling (low materiality) — $87,039 (0.012% of mkt cap)
- ▸Institutions accumulating
Peer rank
6.0/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 3.9 |
| quality rank | 10.0 |
| growth rank | 5.0 |
- ▸Best-in-class margins
Technical
1.9/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 2.8 |
| support resistance | 1.0 |
| 52w position | 1.8 |
Risk (lower is worse)
1.0/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 0.9 |
| days to cover | 1.4 |
| volatility | 0.0 |
| put call | 0.0 |
| implied vol | 0.0 |
| max pain risk | 3.0 |
| beta | 1.5 |
- ▸High short interest justified: 26%
- ▸Elevated put/call: 3.43
- ▸High IV: 112%
- ▸Above max pain $1
Catalyst
7.5/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 10.0 |
- ▸Perfect beat streak: 4Q
How the verdict was assembled
Engine trigger
Extreme risk factors.
Engine technical detail
verdict_path:
L1:HARD_BLOCKPassed (7)
- MOMENTUM:4.6>=4.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:37d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (0)
none
Warning (2)
- MOMENTUM:4.6<5.5 (soft — BUY_NOW allowed but watch)
- ASYMMETRY:UPSIDE_EXHAUSTED (upside=0.0%)
Reward-to-Risk
0.00
Upside
+0.0%
Downside
15.0%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeInst Constrain — Small cap ($0.7B) below institutional reach
SuitabilitySpeculative — Drawdown -41% (>40% off 52w high), Binary industry: Biotechnology
Investment implication
The L1 gate blocked the positive-verdict path: a hard-floor threshold was breached, so dimensional pillars — including Value at 9.2 could not lift the engine output above the verdict floor.
The strongest dimensions are Value at 9.2, Insider at 7.5, and Catalyst at 7.5; the weakest are Risk (lower is worse) at 1.0, Technical at 1.9, and Momentum at 4.6. The V9 engine cleared all gates with 2 warnings, producing an asymmetric reward-to-risk of 0.00 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.