Trade-Ideas LLC identified

Eleven Biotherapeutics

(

EBIO

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

  • EBIO has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $19.7 million.
  • EBIO has traded 130,444 shares today.
  • EBIO is down 3.4% today.
  • EBIO was up 10.4% yesterday.

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More details on EBIO:

Eleven Biotherapeutics, Inc., a biopharmaceutical company, engages in the discovery and development of protein therapeutics to treat eye diseases primarily in the United States. The company develops its therapeutics through AMP-Rx, a proprietary protein engineering platform. Currently there is 1 analyst that rates Eleven Biotherapeutics a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for Eleven Biotherapeutics has been 3.6 million shares per day over the past 30 days. Eleven has a market cap of $69.2 million and is part of the health care sector and drugs industry. Shares are up 31.6% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Eleven Biotherapeutics as a

sell

. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, weak operating cash flow and generally disappointing historical performance in the stock itself.

Highlights from the ratings report include:

  • 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 16.1% when compared to the same quarter one year ago, dropping from -$6.52 million to -$7.57 million.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Biotechnology industry and the overall market, ELEVEN BIOTHERAPEUTICS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has declined marginally to -$8.55 million or 0.84% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, ELEVEN BIOTHERAPEUTICS INC has marginally lower results.
  • Reflecting the weaknesses we have cited, including the decline in the company's earnings per share, EBIO has underperformed the S&P 500 Index, declining 11.87% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
  • ELEVEN BIOTHERAPEUTICS INC's earnings per share declined by 8.3% 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, ELEVEN BIOTHERAPEUTICS INC continued to lose money by earning -$1.75 versus -$2.13 in the prior year. This year, the market expects earnings to be in line with last year (-$1.75 versus -$1.75).

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