PEAR - Pear extends selloff as downgrades follow strategic shake-up

2023-03-20 14:29:08 ET

• After losing over a third of the value in the previous session, Pear Therapeutics ( NASDAQ: PEAR ) shares continued to tumble on Monday as several Wall Street analysts downgraded the health tech company in reaction to its plans to explore strategic alternatives.
• Announcing the decision on Friday, PEAR said that plans for a sale, merger, and divestiture of assets are all on the table, and it has engaged the boutique investment bank MTS Health Partners to obtain advice on the process.
• In the wake of the announcement, Chardan downgraded Pear ( PEAR ) to Neutral from Buy, pulling the price target on the stock due to funding uncertainty.
• "The cash constraint is limiting the company's commercialization effort for Somryst, which requires both generation of additional real world evidence and engagement with payors to establish coverage," the analyst Keay Nakae wrote, referring to PEAR's FDA-cleared insomnia therapy.
• "Friday's news strongly suggests that near-term results and additional payor opportunities have likely underperformed in a meaningful way," TD Cowen analyst Charles Rhyee argued, downgrading PEAR to Market Perform from Underperform.
• BTIG and Credit Suisse also lowered their ratings on Pear ( PEAR ) following the announcement.
• Wall Street has remained bullish on Pear ( PEAR ) stock, with an average rating of Buy from analysts since June, while Seeking Alpha Author ratings indicated a Hold rating. However, SA's Quant System, which consistently beats the market , has rated PEAR as a Strong Sell since January.

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