Today's Dead Cat Bounce Stock: TherapeuticsMD (TXMD)

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 "dead cat bounce" (down big yesterday but up 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 $23.3 million.
  • TXMD has traded 1.6 million shares today.
  • TXMD is up 3.2% today.
  • TXMD was down 8.4% 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 5 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 1.5 million shares per day over the past 30 days. TherapeuticsMD has a market cap of $795.6 million and is part of the health care sector and drugs industry. The stock has a beta of -0.27 and a short float of 19.2% with 3.77 days to cover. Shares are down 3.8% year-to-date as of the close of trading on Wednesday.

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 TherapeuticsMD as a sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating 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 44.0% when compared to the same quarter one year ago, falling from -$6.38 million to -$9.18 million.
  • Net operating cash flow has significantly decreased to -$8.71 million or 148.10% 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 return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. 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 70.65%. Regardless of TXMD's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, TXMD's net profit margin of -324.37% significantly underperformed when compared to the industry average.
  • 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 27.3% in earnings (-$0.28 versus -$0.22).

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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