Stock To Watch: ACADIA Pharmaceuticals (ACAD) In Perilous Reversal
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
(
) as a "perilous reversal" (up big yesterday but down big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified ACADIA Pharmaceuticals as such a stock due to the following factors:
- ACAD has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $88.3 million.
- ACAD has traded 187,822 shares today.
- ACAD is down 3% today.
- ACAD was up 17.9% yesterday.
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More details on ACAD:
ACADIA Pharmaceuticals Inc., a biopharmaceutical company, focuses on the development and commercialization of small molecule drugs that address unmet medical needs in neurological and related central nervous system disorders. Currently there are 7 analysts that rate ACADIA Pharmaceuticals a buy, no analysts rate it a sell, and 1 rates it a hold.
The average volume for ACADIA Pharmaceuticals has been 1.3 million shares per day over the past 30 days. ACADIA has a market cap of $3.9 billion and is part of the health care sector and drugs industry. The stock has a beta of 2.83 and a short float of 28.5% with 8.27 days to cover. Shares are up 22.6% year-to-date as of the close of trading on Monday.
Analysis:
rates ACADIA Pharmaceuticals as a
. The company's weaknesses can be seen in multiple areas, such as its feeble growth in its earnings per share, deteriorating net income and disappointing return on equity.
Highlights from the ratings report include:
- ACADIA PHARMACEUTICALS INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. Earnings per share have declined over the last two years. We anticipate that this should continue in the coming year. During the past fiscal year, ACADIA PHARMACEUTICALS INC reported poor results of -$0.94 versus -$0.44 in the prior year. For the next year, the market is expecting a contraction of 2.1% in earnings (-$0.96 versus -$0.94).
- 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 Biotechnology industry. The net income has significantly decreased by 135.4% when compared to the same quarter one year ago, falling from -$12.05 million to -$28.37 million.
- Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Biotechnology industry and the overall market, ACADIA PHARMACEUTICALS INC's return on equity significantly trails that of both the industry average and the S&P 500.
- Compared to its closing price of one year ago, ACAD's share price has jumped by 37.51%, 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 ACAD do not compensate for any future upside potential, despite the fact that it has seen nice gains over the past 12 months.
- Despite its growing revenue, the company underperformed as compared with the industry average of 35.5%. Since the same quarter one year prior, revenues rose by 29.7%. 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 ACADIA Pharmaceuticals Ratings Report.
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