Perilous Reversal Watch: Acorda Therapeutics (ACOR)

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

  • ACOR has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $49.8 million.
  • ACOR has traded 269,876 shares today.
  • ACOR is down 3.8% today.
  • ACOR was up 28.4% yesterday.

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More details on ACOR:

Acorda Therapeutics, Inc., a biopharmaceutical company, identifies, develops, and commercializes novel therapies for multiple sclerosis (MS), spinal cord injury (SCI), and other disorders of the nervous system in the United States. ACOR has a PE ratio of 65.2. Currently there are 2 analysts that rate Acorda Therapeutics a buy, no analysts rate it a sell, and 4 rate it a hold.

The average volume for Acorda Therapeutics has been 443,900 shares per day over the past 30 days. Acorda has a market cap of $1.2 billion and is part of the health care sector and drugs industry. The stock has a beta of 1.90 and a short float of 9.5% with 3.48 days to cover. Shares are up 28.8% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Acorda Therapeutics as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, reasonable valuation levels, good cash flow from operations, expanding profit margins and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Highlights from the ratings report include:
  • The revenue growth significantly trails the industry average of 43.1%. Since the same quarter one year prior, revenues rose by 11.6%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • Net operating cash flow has significantly increased by 125.16% to $18.71 million when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 100.84%.
  • The gross profit margin for ACORDA THERAPEUTICS INC is currently very high, coming in at 82.30%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, ACOR's net profit margin of 4.82% significantly trails the industry average.
  • Despite currently having a low debt-to-equity ratio of 0.57, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 6.69 is very high and demonstrates very strong liquidity.

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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