TherapeuticsMD (TXMD) Showing Signs Of Perilous Reversal Today

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

  • TXMD has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $16.3 million.
  • TXMD has traded 456,804 shares today.
  • TXMD is down 3% today.
  • TXMD was up 5.2% yesterday.

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More details on TXMD:

TherapeuticsMD, Inc., a U.S. women's healthcare product company, manufactures and distributes branded and generic prescription prenatal vitamins, as well as over-the-counter, vitamins, and cosmetics. Currently there are 4 analysts that rate TherapeuticsMD a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for TherapeuticsMD has been 1.1 million shares per day over the past 30 days. TherapeuticsMD has a market cap of $870.1 million and is part of the health care sector and drugs industry. The stock has a beta of -0.05 and a short float of 10.4% with 3.34 days to cover. Shares are up 21.1% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates TherapeuticsMD as a sell. The company's weaknesses can be seen in multiple areas, such as its unimpressive growth in net income and weak operating cash flow.

Highlights from the ratings report include:
  • 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 46.3% when compared to the same quarter one year ago, falling from -$5.73 million to -$8.38 million.
  • Net operating cash flow has decreased to -$4.88 million or 12.37% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
  • THERAPEUTICSMD INC reported flat earnings per share in the most recent quarter. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, THERAPEUTICSMD INC continued to lose money by earning -$0.22 versus -$0.40 in the prior year. For the next year, the market is expecting a contraction of 22.7% in earnings (-$0.27 versus -$0.22).
  • Compared to other companies in the Pharmaceuticals industry and the overall market, THERAPEUTICSMD INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for THERAPEUTICSMD INC is currently very high, coming in at 83.65%. It has increased significantly from the same period last year. Regardless of the strong results of the gross profit margin, the net profit margin of -292.66% is in-line with the industry average.

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