Shares of EndoChoice Holdings, Inc. (NYSE:GI) have entered overbought territory as the 14-day RSI reading touched 85.41 after yesterday’s close. Investors should be cautious of taking positions as this might indicate the stock is due to reverse course.
RSI or Relative Strength Index is a momentum indicator that technical investors use along with other factors in trying to determine the short term direction of a stock. The RSI can help pinpoint stock reversals and help coordinate taking positions accordingly. The RSI takes the closing prices of a given stock over a 14-day period (typically) and calculates a ratio of the number of higher close days to the number of lower close days. With EndoChoice Holdings, Inc. (NYSE:GI) shares passing the 70 level, the stock is now considered to be in overbought territory and ripe for a potential pullback.
EndoChoice Holdings, Inc. (NYSE:GI) shares have traded 93.69% for the week and are -4.43% for the year. At the time of writing, the stock is trading at $7.98, a change of 0.25% from the previous close. In terms of volatility, the average daily high/low percentage range stands at 1.60% for the week and 5.39% for the month.
So, most importantly, where are shares headed from here? In order to get a sense of Wall Street sentiment, we can look to brokerage analyst estimates. On a one to five ratings scale where 1.0 indicates a Strong Buy, 2.0 indicates a Buy, 3.0 a Hold, 4.0 a Sell and 5.0 a Stong Sell. EndoChoice Holdings, Inc. currently has an average analyst recommendation of 2.80 according to analysts. This is the average number based on the total brokerage firms taken into consideration by Beta Systems Research. The same analysts have a future one-year price target of $8.50 on the shares.
In addition to sell-side rational, we can also take a look at some technical indicators. The stock is currently 75.32% away from its 50-day simple moving average and 54.65% away from the 200 day average. Based on a recent trade, the shares are -38.33% away from the 52-week high and 119.23% from the 52-week low.
In terms of financials, we can look at several key indicators. The company has a Return on Asses of -43.70%, which is a key factor in determining the effectiveness of management’s use of assets to generate earnings. The company currently has a Return on Equity of -74.70% and a Return on Investment of -36.80%. In terms of earnings per share, which is typically considered to be the most important variable in determining the value of a company, currently stands at -2.66 for the trailing 12-months or a -28.20% for the year. Analysts are expecting a change in EPS of 43.50% for the stock.
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