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

Enanta Pharmaceuticals

(

ENTA

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

  • ENTA has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $29.4 million.
  • ENTA has traded 81,210 shares today.
  • ENTA is down 3% today.
  • ENTA was up 10.1% yesterday.

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More details on ENTA:

Enanta Pharmaceuticals, Inc., a biotechnology company, discovers and develops small molecule drugs for the infectious disease field in the United States. ENTA has a PE ratio of 24.9. Currently there are 3 analysts that rate Enanta Pharmaceuticals a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for Enanta Pharmaceuticals has been 312,600 shares per day over the past 30 days. Enanta has a market cap of $834.8 million and is part of the health care sector and drugs industry. Shares are up 70.9% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Enanta Pharmaceuticals as a

hold

. The company's strengths can be seen in multiple areas, such as its notable return on equity, robust revenue growth and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income and weak operating cash flow.

Highlights from the ratings report include:

  • Compared to other companies in the Biotechnology industry and the overall market, ENANTA PHARMACEUTICALS INC's return on equity exceeds that of both the industry average and the S&P 500.
  • ENTA's very impressive revenue growth greatly exceeded the industry average of 40.9%. Since the same quarter one year prior, revenues leaped by 95.5%. 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.
  • ENANTA PHARMACEUTICALS INC's earnings per share declined by 8.0% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, ENANTA PHARMACEUTICALS INC turned its bottom line around by earning $1.76 versus -$0.78 in the prior year. This year, the market expects an improvement in earnings ($8.82 versus $1.76).
  • The company, on the basis of change in net income from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and greatly underperformed compared to the Biotechnology industry average. The net income has decreased by 13.5% when compared to the same quarter one year ago, dropping from -$4.44 million to -$5.04 million.
  • Net operating cash flow has significantly decreased to -$4.93 million or 97.04% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.

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