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

  • RGLS has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $24.5 million.
  • RGLS has traded 112,947 shares today.
  • RGLS is down 3.6% today.
  • RGLS was up 10.2% yesterday.

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More details on RGLS:

Regulus Therapeutics Inc., a biopharmaceutical company, focuses on the discovery and development of drugs that target microRNAs for the treatment of various diseases in the United States. Currently there are 3 analysts that rate Regulus Therapeutics a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for Regulus Therapeutics has been 1.4 million shares per day over the past 30 days. Regulus has a market cap of $788.8 million and is part of the health care sector and drugs industry. The stock has a beta of 1.79 and a short float of 38.6% with 3.32 days to cover. Shares are up 142.1% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Regulus Therapeutics as a sell. The company's weaknesses can be seen in multiple areas, such as its feeble growth in its earnings per share, deteriorating net income, disappointing return on equity and weak operating cash flow.

Highlights from the ratings report include:
  • REGULUS THERAPEUTICS 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. Earnings per share have declined over the last year. We anticipate that this should continue in the coming year. During the past fiscal year, REGULUS THERAPEUTICS INC reported poor results of -$0.58 versus -$0.37 in the prior year. For the next year, the market is expecting a contraction of 81.0% in earnings (-$1.05 versus -$0.58).
  • 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 352.8% when compared to the same quarter one year ago, falling from -$2.16 million to -$9.80 million.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Biotechnology industry and the overall market, REGULUS THERAPEUTICS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has significantly decreased to -$8.80 million or 98.73% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • RGLS, with its very weak revenue results, has greatly underperformed against the industry average of 40.8%. Since the same quarter one year prior, revenues plummeted by 82.3%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing 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.

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