Perilous Reversal Stock: AcelRx Pharmaceuticals (ACRX)

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

  • ACRX has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $22.1 million.
  • ACRX has traded 558,548 shares today.
  • ACRX is down 3% today.
  • ACRX was up 6.7% yesterday.

EXCLUSIVE OFFER: Get the inside scoop on opportunities in ACRX with the Ticky from Trade-Ideas. See the FREE profile for ACRX NOW at Trade-Ideas

More details on ACRX:

AcelRx Pharmaceuticals, Inc., a development stage specialty pharmaceutical company, focuses on the development and commercialization of therapies for the treatment of acute and breakthrough pain (BTP). Currently there are 4 analysts that rate AcelRx Pharmaceuticals a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for AcelRx Pharmaceuticals has been 1.1 million shares per day over the past 30 days. AcelRx has a market cap of $282.8 million and is part of the health care sector and health services industry. The stock has a beta of 1.84 and a short float of 24.4% with 2.39 days to cover. Shares are down 38.5% year-to-date as of the close of trading on Thursday.

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 AcelRx Pharmaceuticals as a sell. The company's weaknesses can be seen in multiple areas, such as its generally disappointing historical performance in the stock itself and weak operating cash flow.

Highlights from the ratings report include:
  • ACRX has underperformed the S&P 500 Index, declining 17.12% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
  • Net operating cash flow has declined marginally to -$10.13 million or 4.75% when compared to the same quarter last year. Despite a decrease in cash flow of 4.75%, ACELRX PHARMACEUTICALS INC is still significantly exceeding the industry average of -54.80%.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Pharmaceuticals industry and the overall market, ACELRX PHARMACEUTICALS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • ACELRX PHARMACEUTICALS INC has improved earnings per share by 35.3% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, ACELRX PHARMACEUTICALS INC continued to lose money by earning -$0.68 versus -$1.50 in the prior year. For the next year, the market is expecting a contraction of 63.2% in earnings (-$1.11 versus -$0.68).
  • ACRX, with its very weak revenue results, has greatly underperformed against the industry average of 6.3%. Since the same quarter one year prior, revenues plummeted by 89.9%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

null

More from Markets

Oil Slumps, Gas Spikes Ahead of Holiday Weekend; Assessing the Chipmakers--ICYMI

Oil Slumps, Gas Spikes Ahead of Holiday Weekend; Assessing the Chipmakers--ICYMI

Week Ahead: Wall Street Looks to Jobs Report as North Korea Meeting Less Certain

Week Ahead: Wall Street Looks to Jobs Report as North Korea Meeting Less Certain

Dow and S&P 500 Decline, Energy Shares Fall as U.S. Crude Oil Slides 4%

Dow and S&P 500 Decline, Energy Shares Fall as U.S. Crude Oil Slides 4%

Replay: Jim Cramer on the Markets, 10-Year Yield, Oil Prices and Foot Locker

Replay: Jim Cramer on the Markets, 10-Year Yield, Oil Prices and Foot Locker

Video: You Could Live in a Ritz-Carlton or St. Regis Home

Video: You Could Live in a Ritz-Carlton or St. Regis Home