Today's Post-Market Laggard: Cubist Pharmaceuticals (CBST)

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

  • CBST has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $75.1 million.
  • CBST is down 4.8% today from today's close.

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More details on CBST:

Cubist Pharmaceuticals, Inc., a biopharmaceutical company, focuses on the research, development, and commercialization of pharmaceutical products for various medical needs in the acute care environment in the United States. CBST has a PE ratio of 46.6. Currently there are 8 analysts that rate Cubist Pharmaceuticals a buy, no analysts rate it a sell, and 7 rate it a hold.

The average volume for Cubist Pharmaceuticals has been 952,000 shares per day over the past 30 days. Cubist has a market cap of $4.3 billion and is part of the health care sector and drugs industry. The stock has a beta of 0.81 and a short float of 11.8% with 4.83 days to cover. Shares are up 53% year to date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Cubist Pharmaceuticals as a buy. 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, reasonable valuation levels, expanding profit margins and solid stock price performance. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • CBST's revenue growth has slightly outpaced the industry average of 8.7%. Since the same quarter one year prior, revenues rose by 12.2%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • The current debt-to-equity ratio, 0.35, is low and is below the industry average, implying that there has been successful management of debt levels. Along with this, the company maintains a quick ratio of 4.19, which clearly demonstrates the ability to cover short-term cash needs.
  • The gross profit margin for CUBIST PHARMACEUTICALS INC is currently very high, coming in at 79.41%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, CBST's net profit margin of 5.88% significantly trails the industry average.
  • Compared to its closing price of one year ago, CBST's share price has jumped by 40.22%, exceeding the performance of the broader market during that same time frame. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.

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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