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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.

Trade-Ideas LLC identified

Zogenix

(

ZGNX

) as a pre-market mover with heavy volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Zogenix as such a stock due to the following factors:

  • ZGNX has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $12.4 million.
  • ZGNX traded 72,585 shares today in the pre-market hours as of 8:58 AM, representing 11.1% of its average daily volume.

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More details on ZGNX:

Zogenix, Inc., a pharmaceutical company, develops and commercializes therapies for the treatment of central nervous system disorders in the United States. Its marketed product includes Zohydro ER, an extended-release formulation of hydrocodone for the treatment of severe chronic pain. ZGNX has a PE ratio of 32. Currently there are 5 analysts that rate Zogenix a buy, no analysts rate it a sell, and 1 rates it a hold.

TheStreet Recommends

The average volume for Zogenix has been 475,600 shares per day over the past 30 days. Zogenix has a market cap of $3.2 billion and is part of the health care sector and drugs industry. The stock has a beta of 1.48 and a short float of 2.5% with 4.96 days to cover. Shares are up 92.8% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Zogenix as a

hold

. The company's strengths can be seen in multiple areas, such as its solid stock price performance, notable return on equity and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including poor profit margins and unimpressive growth in net income.

Highlights from the ratings report include:

  • Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 50.81% over the past year, a rise that has exceeded that of the S&P 500 Index. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Pharmaceuticals industry and the overall market, ZOGENIX INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • The debt-to-equity ratio is somewhat low, currently at 0.71, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Despite the fact that ZGNX's debt-to-equity ratio is low, the quick ratio, which is currently 0.70, displays a potential problem in covering short-term cash needs.
  • The change in net income from the same quarter one year ago has exceeded that of the S&P 500, but is less than that of the Pharmaceuticals industry average. The net income has decreased by 9.2% when compared to the same quarter one year ago, dropping from -$20.93 million to -$22.86 million.
  • The gross profit margin for ZOGENIX INC is rather low; currently it is at 21.93%. It has decreased significantly from the same period last year. Along with this, the net profit margin of -495.47% is significantly below that of the industry average.

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