Today's Perilous Reversal Stock: Epizyme (EPZM)

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

  • EPZM has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $16.5 million.
  • EPZM has traded 50,382 shares today.
  • EPZM is down 4.5% today.
  • EPZM was up 12.6% yesterday.

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More details on EPZM:

Epizyme, Inc., a clinical stage biopharmaceutical company, discovers and develops personalized therapeutics for patients with genetically defined cancers. EPZM has a PE ratio of 9.1. Currently there are 2 analysts that rate Epizyme a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for Epizyme has been 243,000 shares per day over the past 30 days. Epizyme has a market cap of $1.2 billion and is part of the health care sector and drugs industry. Shares are up 68.4% 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 Epizyme as a hold. The company's strengths can be seen in multiple areas, such as its increase in stock price during the past year and notable return on equity. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share and deteriorating net income.

Highlights from the ratings report include:
  • 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. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
  • Compared to other companies in the Biotechnology industry and the overall market, EPIZYME INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The revenue fell significantly faster than the industry average of 42.2%. Since the same quarter one year prior, revenues fell by 36.0%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • EPIZYME 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. For the next year, the market is expecting a contraction of 908.8% in earnings (-$1.72 versus -$0.17).
  • 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 505.1% when compared to the same quarter one year ago, falling from -$2.21 million to -$13.39 million.

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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