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 Exelixis ( EXEL) as a "dead cat bounce" (down big yesterday but up big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Exelixis as such a stock due to the following factors:
- EXEL has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $32.1 million.
- EXEL has traded 108,891 shares today.
- EXEL is up 4.5% today.
- EXEL was down 39.4% yesterday.
EXCLUSIVE OFFER: Get the inside scoop on opportunities in EXEL with the Ticky from Trade-Ideas. See the FREE profile for EXEL NOW at Trade-Ideas More details on EXEL: Exelixis, Inc., a biotechnology company, develops small molecule therapies for the treatment of cancer in the United States. Currently there are 5 analysts that rate Exelixis a buy, no analysts rate it a sell, and 3 rate it a hold. The average volume for Exelixis has been 3.5 million shares per day over the past 30 days. Exelixis has a market cap of $1.2 billion and is part of the health care sector and drugs industry. The stock has a beta of 2.27 and a short float of 44.5% with 6.01 days to cover. Shares are up 5.1% year-to-date as of the close of trading on Tuesday. 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 Exelixis 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, disappointing return on equity, weak operating cash flow and generally high debt management risk. Highlights from the ratings report include:
- EXELIXIS INC's earnings per share declined by 35.7% 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, EXELIXIS INC reported poor results of -$1.32 versus -$0.91 in the prior year. For the next year, the market is expecting a contraction of 14.4% in earnings (-$1.51 versus -$1.32).
- 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 Biotechnology industry. The net income has significantly decreased by 35.5% when compared to the same quarter one year ago, falling from -$52.19 million to -$70.75 million.
- 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 Biotechnology industry and the overall market, EXELIXIS INC's return on equity significantly trails that of both the industry average and the S&P 500.
- Net operating cash flow has decreased to -$47.33 million or 22.18% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- The debt-to-equity ratio is very high at 5.24 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Despite the company's weak debt-to-equity ratio, the company has managed to keep a very strong quick ratio of 2.94, which shows the ability to cover short-term cash needs.
- You can view the full Exelixis Ratings Report.
STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.