Stock To Watch: Medidata Solutions (MDSO) In Perilous Reversal

Trade-Ideas LLC identified Medidata Solutions (MDSO) as a "perilous reversal" (up big yesterday but down big today) candidate
By TheStreet Wire ,

Trade-Ideas LLC identified

Medidata Solutions

(

MDSO

) as a "perilous reversal" (up big yesterday but down big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Medidata Solutions as such a stock due to the following factors:

  • MDSO has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $34.4 million.
  • MDSO has traded 53,027 shares today.
  • MDSO is down 3.1% today.
  • MDSO was up 14.7% yesterday.

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More details on MDSO:

Medidata Solutions, Inc. provides cloud-based solutions for life sciences worldwide. The company offers applications and data analytics for clinical development. MDSO has a PE ratio of 142. Currently there are 8 analysts that rate Medidata Solutions a buy, 1 analyst rates it a sell, and 1 rates it a hold.

The average volume for Medidata Solutions has been 354,400 shares per day over the past 30 days. Medidata has a market cap of $2.7 billion and is part of the technology sector and computer software & services industry. The stock has a beta of 1.56 and a short float of 11.5% with 8.47 days to cover. Shares are up 8.7% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Medidata Solutions as a

hold

. The company's strengths can be seen in multiple areas, such as its revenue growth, compelling growth in net income and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including premium valuation, weak operating cash flow and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:

  • The revenue growth came in higher than the industry average of 1.9%. Since the same quarter one year prior, revenues rose by 12.8%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • MEDIDATA SOLUTIONS INC has shown improvement in its earnings for its most recently reported quarter when compared with the same quarter a year earlier. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, MEDIDATA SOLUTIONS INC increased its bottom line by earning $0.23 versus $0.11 in the prior year. This year, the market expects an improvement in earnings ($1.01 versus $0.23).
  • MDSO's debt-to-equity ratio of 0.86 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 4.00 is very high and demonstrates very strong liquidity.
  • Net operating cash flow has decreased to $12.46 million or 26.10% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.

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