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Trade-Ideas LLC identified

Cytokinetics

(

CYTK

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

  • CYTK has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $16.5 million.
  • CYTK has traded 61,628 shares today.
  • CYTK is down 3.2% today.
  • CYTK was up 13.6% yesterday.

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More details on CYTK:

Cytokinetics, Incorporated, a clinical stage biopharmaceutical company, focuses on the discovery and development of novel small molecule therapeutics that modulate muscle function for the treatment of serious diseases and medical conditions. Currently there are 4 analysts that rate Cytokinetics a buy, no analysts rate it a sell, and none rate it a hold.

TheStreet Recommends

The average volume for Cytokinetics has been 441,200 shares per day over the past 30 days. Cytokinetics has a market cap of $419.3 million and is part of the health care sector and drugs industry. The stock has a beta of 1.51 and a short float of 5.7% with 1.57 days to cover. Shares are up 53.4% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Cytokinetics as a

sell

. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity 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 Biotechnology industry. The net income has significantly decreased by 48.2% when compared to the same quarter one year ago, falling from -$5.97 million to -$8.85 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, CYTOKINETICS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • CYTOKINETICS INC's earnings per share declined by 43.8% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, CYTOKINETICS INC continued to lose money by earning -$0.43 versus -$1.34 in the prior year. For the next year, the market is expecting a contraction of 151.2% in earnings (-$1.08 versus -$0.43).
  • CYTK, with its decline in revenue, underperformed when compared the industry average of 11.3%. Since the same quarter one year prior, revenues fell by 15.6%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • CYTK has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 3.25, which clearly demonstrates the ability to cover short-term cash needs.

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