Trade-Ideas: Nektar Therapeutics (NKTR) Is Today's "Dead Cat Bounce" Stock
Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.Trade-Ideas LLC identified Nektar Therapeutics (NKTR) as a "dead cat bounce" (down big yesterday but up big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Nektar Therapeutics as such a stock due to the following factors:
- NKTR has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $21.6 million.
- NKTR has traded 652,950 shares today.
- NKTR is up 3.1% today.
- NKTR was down 23.9% yesterday.
EXCLUSIVE OFFER: Get the inside scoop on opportunities in NKTR with the Ticky from Trade-Ideas. See the FREE profile for NKTR NOW at Trade-IdeasMore details on NKTR: Nektar Therapeutics, a clinical-stage biopharmaceutical company, engages in developing a pipeline of drug candidates that utilize its PEGylation and polymer conjugate technology platforms. Currently there are 7 analysts that rate Nektar Therapeutics a buy, 1 analyst rates it a sell, and 1 rates it a hold.The average volume for Nektar Therapeutics has been 1.1 million shares per day over the past 30 days. Nektar has a market cap of $1.6 billion and is part of the health care sector and drugs industry. The stock has a beta of 1.79 and a short float of 5.3% with 2.43 days to cover. Shares are up 84.5% year to date as of the close of trading on Friday.STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.TheStreetRatings.com Analysis:TheStreet Quant Ratings rates Nektar Therapeutics as a sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, weak operating cash flow and feeble growth in its earnings per share.Highlights from the ratings report include:
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Pharmaceuticals industry. The net income has decreased by 24.7% when compared to the same quarter one year ago, dropping from -$34.29 million to -$42.75 million.
- Net operating cash flow has significantly decreased to -$34.34 million or 66.75% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- NEKTAR THERAPEUTICS's earnings per share declined by 23.3% in the most recent quarter compared to the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, NEKTAR THERAPEUTICS reported poor results of -$1.50 versus -$1.19 in the prior year. This year, the market expects an improvement in earnings (-$0.99 versus -$1.50).
- Compared to its closing price of one year ago, NKTR's share price has jumped by 43.45%, exceeding the performance of the broader market during that same time frame. Regarding the future course of this stock, we feel that the risks involved in investing in NKTR do not compensate for any future upside potential, despite the fact that it has seen nice gains over the past 12 months.
- The revenue growth greatly exceeded the industry average of 3.9%. Since the same quarter one year prior, revenues rose by 43.0%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- You can view the full Nektar Therapeutics Ratings Report.
STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV