Exact (EXAS) In A Perilous Reversal

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

  • EXAS has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $68.7 million.
  • EXAS has traded 210,936 shares today.
  • EXAS is down 3.2% today.
  • EXAS was up 6.3% yesterday.

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More details on EXAS:

Exact Sciences Corporation, a molecular diagnostics company, focuses on developing diagnostic screening products for the early detection and prevention of colorectal pre-cancer and cancer. Currently there are 6 analysts that rate Exact a buy, 1 analyst rates it a sell, and 2 rate it a hold.

The average volume for Exact has been 1.6 million shares per day over the past 30 days. Exact has a market cap of $1.8 billion and is part of the health care sector and drugs industry. The stock has a beta of 1.54 and a short float of 35.1% with 8.41 days to cover. Shares are up 92.1% 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 Exact as a sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, weak operating cash flow, poor profit margins and feeble growth in its earnings per share.

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 Biotechnology industry. The net income has significantly decreased by 57.8% when compared to the same quarter one year ago, falling from -$12.31 million to -$19.44 million.
  • Net operating cash flow has significantly decreased to -$16.54 million or 68.13% 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 gross profit margin for EXACT SCIENCES CORP is currently extremely low, coming in at 0.00%. Despite the low profit margin, it has increased significantly from the same period last year.
  • EXACT SCIENCES CORP's earnings per share declined by 26.3% in the most recent quarter compared to the same quarter a year ago. 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, EXACT SCIENCES CORP continued to lose money by earning -$0.69 versus -$0.88 in the prior year. For the next year, the market is expecting a contraction of 65.2% in earnings (-$1.14 versus -$0.69).
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Biotechnology industry and the overall market, EXACT SCIENCES CORP's return on equity significantly trails that of both the industry average and the S&P 500.

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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