Trade-Ideas: Omeros Corporation (OMER) Is Today's

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

  • OMER has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $26.9 million.
  • OMER has traded 1.1 million shares today.
  • OMER is down 3.1% today.
  • OMER was up 28.2% yesterday.

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More details on OMER:

Omeros Corporation, a clinical-stage biopharmaceutical company, engages in discovering, developing, and commercializing products targeting inflammation, coagulopathies, and disorders of the central nervous system. Currently there are 4 analysts that rate Omeros Corporation a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for Omeros Corporation has been 499,600 shares per day over the past 30 days. Omeros has a market cap of $213.7 million and is part of the health care sector and drugs industry. The stock has a beta of 0.77 and a short float of 26.3% with 2.05 days to cover. Shares are up 38% year to date as of the close of trading on Monday.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.

TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Omeros Corporation as a sell. The company's weaknesses can be seen in multiple areas, such as its feeble growth in its earnings per share, deteriorating net income, weak operating cash flow and generally disappointing historical performance in the stock itself.

Highlights from the ratings report include:
  • OMEROS CORP's earnings per share declined by 26.3% in the most recent quarter compared to the same quarter a year ago. Earnings per share have declined over the last two years. We anticipate that this should continue in the coming year. During the past fiscal year, OMEROS CORP reported poor results of -$1.59 versus -$1.29 in the prior year. For the next year, the market is expecting a contraction of 8.2% in earnings (-$1.72 versus -$1.59).
  • 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 Pharmaceuticals industry. The net income has significantly decreased by 59.2% when compared to the same quarter one year ago, falling from -$8.54 million to -$13.59 million.
  • Net operating cash flow has declined marginally to -$9.39 million or 6.00% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, OMEROS CORP has marginally lower results.
  • The share price of OMEROS CORP has not done very well: it is down 19.46% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. 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.
  • OMER, with its very weak revenue results, has greatly underperformed against the industry average of 3.9%. Since the same quarter one year prior, revenues plummeted by 90.8%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.
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