Cubist Pharmaceuticals (CBST): Heavy Pre-Market Activity

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 Cubist Pharmaceuticals ( CBST) as a pre-market mover with heavy volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Cubist Pharmaceuticals as such a stock due to the following factors:

  • CBST has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $51.1 million.
  • CBST traded 158,476 shares today in the pre-market hours as of 7:40 AM, representing 31.2% of its average daily volume.

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More details on CBST:

Cubist Pharmaceuticals, Inc., a biopharmaceutical company, is engaged in the research, development, and commercialization of pharmaceutical products for medical needs in the acute care environment in the United States. CBST has a PE ratio of 92.6. Currently there are 6 analysts that rate Cubist Pharmaceuticals a buy, 1 analyst rates it a sell, and 5 rate it a hold.

The average volume for Cubist Pharmaceuticals has been 627,400 shares per day over the past 30 days. Cubist has a market cap of $5.8 billion and is part of the health care sector and drugs industry. The stock has a beta of 1.56 and a short float of 7.7% with 9.01 days to cover. Shares are up 8.2% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Cubist Pharmaceuticals as a buy. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, robust revenue growth, good cash flow from operations, increase in stock price during the past year and impressive record of earnings per share growth. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook.

Highlights from the ratings report include:
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Biotechnology industry. The net income increased by 167.3% when compared to the same quarter one year prior, rising from -$33.90 million to $22.83 million.
  • CBST's revenue growth trails the industry average of 40.7%. Since the same quarter one year prior, revenues rose by 16.2%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Net operating cash flow has significantly increased by 174.27% to $43.25 million when compared to the same quarter last year. In addition, CUBIST PHARMACEUTICALS INC has also vastly surpassed the industry average cash flow growth rate of 116.43%.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that the other strengths this company displays justify these higher price levels.
  • CUBIST PHARMACEUTICALS INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, CUBIST PHARMACEUTICALS INC swung to a loss, reporting -$0.26 versus $2.09 in the prior year. This year, the market expects an improvement in earnings ($1.15 versus -$0.26).

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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