Perilous Reversal Stock: Insys Therapeutics (INSY)

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

  • INSY has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $23.7 million.
  • INSY has traded 180,379 shares today.
  • INSY is down 3.2% today.
  • INSY was up 5.8% yesterday.

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More details on INSY:

Insys Therapeutics, Inc., a commercial-stage specialty pharmaceutical company, develops and commercializes supportive care products. It focuses on utilizing its proprietary formulation technologies to address the clinical shortcomings of existing commercial pharmaceutical products. INSY has a PE ratio of 21.1. Currently there are 2 analysts that rate Insys Therapeutics a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for Insys Therapeutics has been 543,600 shares per day over the past 30 days. Insys has a market cap of $1.2 billion and is part of the health care sector and drugs industry. Shares are up 42.5% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Insys Therapeutics as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures and notable return on equity. However, as a counter to these strengths, we find that the growth in the company's earnings per share has not been good.

Highlights from the ratings report include:
  • INSY's very impressive revenue growth greatly exceeded the industry average of 42.3%. Since the same quarter one year prior, revenues leaped by 195.9%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • INSY has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. To add to this, INSY has a quick ratio of 2.49, which demonstrates the ability of the company to cover short-term liquidity needs.
  • The gross profit margin for INSYS THERAPEUTICS INC is currently very high, coming in at 89.28%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, INSY's net profit margin of 16.99% significantly trails the industry average.
  • INSYS THERAPEUTICS INC reported significant earnings per share improvement 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, INSYS THERAPEUTICS INC turned its bottom line around by earning $1.17 versus -$0.78 in the prior year. For the next year, the market is expecting a contraction of 7.4% in earnings ($1.08 versus $1.17).

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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