Trade-Ideas: ViroPharma (VPHM) Is Today's Post-Market Laggard Stock

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 ViroPharma ( VPHM) as a post-market laggard candidate. In addition to specific proprietary factors, Trade-Ideas identified ViroPharma as such a stock due to the following factors:

  • VPHM has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $94.1 million.
  • VPHM is down 2.9% today from today's close.

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More details on VPHM:

ViroPharma Incorporated, a biotechnology company, develops and commercializes therapeutic products that address serious diseases in the United States and internationally. Currently there are 8 analysts that rate ViroPharma a buy, 1 analyst rates it a sell, and 5 rate it a hold.

The average volume for ViroPharma has been 1.2 million shares per day over the past 30 days. ViroPharma has a market cap of $2.6 billion and is part of the health care sector and drugs industry. The stock has a beta of 1.59 and a short float of 25% with 3.78 days to cover. Shares are up 72% year to date as of the close of trading on Tuesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates ViroPharma as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and solid stock price performance. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity, weak operating cash flow and feeble growth in the company's earnings per share.

Highlights from the ratings report include:
  • VPHM's revenue growth has slightly outpaced the industry average of 3.9%. Since the same quarter one year prior, revenues slightly increased by 9.6%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • VPHM's debt-to-equity ratio is very low at 0.24 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 3.51, which clearly demonstrates the ability to cover short-term cash needs.
  • The gross profit margin for VIROPHARMA INC is currently very high, coming in at 72.59%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, VPHM's net profit margin of 0.57% significantly trails the industry average.
  • 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 Pharmaceuticals industry and the overall market, VIROPHARMA INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has significantly decreased to -$4.61 million or 121.35% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.

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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