Could The Revance Therapeutics, Inc. (NASDAQ:RVNC) Ownership Structure Tell Us Something Useful?

By
Simply Wall St
Published
February 24, 2021
NasdaqGM:RVNC

A look at the shareholders of Revance Therapeutics, Inc. (NASDAQ:RVNC) can tell us which group is most powerful. Generally speaking, as a company grows, institutions will increase their ownership. Conversely, insiders often decrease their ownership over time. Companies that used to be publicly owned tend to have lower insider ownership.

Revance Therapeutics has a market capitalization of US$1.8b, so we would expect some institutional investors to have noticed the stock. Our analysis of the ownership of the company, below, shows that institutional investors have bought into the company. Let's take a closer look to see what the different types of shareholders can tell us about Revance Therapeutics.

See our latest analysis for Revance Therapeutics

ownership-breakdown
NasdaqGM:RVNC Ownership Breakdown February 24th 2021

What Does The Institutional Ownership Tell Us About Revance Therapeutics?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

Revance Therapeutics already has institutions on the share registry. Indeed, they own a respectable stake in the company. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Revance Therapeutics, (below). Of course, keep in mind that there are other factors to consider, too.

earnings-and-revenue-growth
NasdaqGM:RVNC Earnings and Revenue Growth February 24th 2021

Institutional investors own over 50% of the company, so together than can probably strongly influence board decisions. Hedge funds don't have many shares in Revance Therapeutics. The company's largest shareholder is BlackRock, Inc., with ownership of 7.5%. For context, the second largest shareholder holds about 5.9% of the shares outstanding, followed by an ownership of 4.9% by the third-largest shareholder. Additionally, the company's CEO Mark Foley directly holds 1.3% of the total shares outstanding.

A closer look at our ownership figures suggests that the top 11 shareholders have a combined ownership of 53% implying that no single shareholder has a majority.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of Revance Therapeutics

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.

Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.

I can report that insiders do own shares in Revance Therapeutics, Inc.. The insiders have a meaningful stake worth US$53m. Most would see this as a real positive. It is good to see this level of investment by insiders. You can check here to see if those insiders have been buying recently.

General Public Ownership

With a 16% ownership, the general public have some degree of sway over Revance Therapeutics. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Next Steps:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. Take risks for example - Revance Therapeutics has 2 warning signs we think you should be aware of.

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures.

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This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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