Why Stereotaxis Inc. (STXS) is Up Today

NEW YORK (TheStreet) -- Stereotaxis Inc.  (STXS) soared 18% in morning trading on Tuesday after the company announced that it had completed an FDA trial of 120 subjects for its cardiology navigation product.

Stereotaxis tested the Vdrive Robotic Navigation System with V-Loop Circular Catheter Manipulator, which it designed for "remotely controlling the advancement, retraction, rotation, tip deflection and loop size of a compatible catheter," according to a company press release.

If the FDA clears the product, then the Vdrive with V-Loop system would be the second Vdrive product cleared for use in the U.S. The FDA cleared the Vdrive with V-Sono Intracardiac Echocardiography Catheter Manipulator in July 2013, and the product has been used in more than 50 cardiac ablation procedures thus far in the U.S.

TheStreet Ratings team rates STEREOTAXIS INC as a Sell with a ratings score of E+. The team has this to say about its recommendation:

"This is based on some significant below-par investment measures, which should drive this stock to significantly underperform the majority of stocks that we rate. Among the areas we feel are negative, one of the most important has been generally deteriorating net income."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • 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 Health Care Equipment & Supplies industry. The net income has significantly decreased by 2868.1% when compared to the same quarter one year ago, falling from -$1.92 million to -$56.87 million.
  • STXS, with its decline in revenue, slightly underperformed the industry average of 3.5%. Since the same quarter one year prior, revenues slightly dropped by 6.4%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • The gross profit margin for STEREOTAXIS INC is currently very high, coming in at 70.31%. Regardless of STXS's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, STXS's net profit margin of -525.53% significantly underperformed when compared to the industry average.
  • STEREOTAXIS INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has not demonstrated a clear trend in earnings over the past 2 years, making it difficult to accurately predict earnings for the coming year. During the past fiscal year, STEREOTAXIS INC continued to lose money by earning -$1.60 versus -$5.80 in the prior year.
  • Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. Turning our attention to the future direction of the stock, we do not believe this stock offers ample reward opportunity to compensate for the risks, despite the fact that it rose over the past year.
  • You can view the full analysis from the report here: STXS Ratings Report
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