Macrogenics (MGNX) Highlighted As Today's Perilous Reversal Stock

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

  • MGNX has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $16.2 million.
  • MGNX has traded 435,172 shares today.
  • MGNX is down 12.1% today.
  • MGNX was up 11.7% yesterday.

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More details on MGNX:

MacroGenics, Inc., a clinical-stage biopharmaceutical company, focuses on discovering and developing monoclonal antibody-based therapeutics for the treatment of cancer and autoimmune diseases. Currently there are 6 analysts that rate Macrogenics a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for Macrogenics has been 244,500 shares per day over the past 30 days. Macrogenics has a market cap of $940.3 million and is part of the health care sector and drugs industry. Shares are up 23.3% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Macrogenics as a sell. The company's weaknesses can be seen in multiple areas, such as its feeble growth in its earnings per share and deteriorating net income.

Highlights from the ratings report include:
  • MACROGENICS 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. For the next year, the market is expecting a contraction of 935.7% in earnings (-$1.17 versus $0.14).
  • 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 159.5% when compared to the same quarter one year ago, falling from $6.60 million to -$3.93 million.
  • The revenue fell significantly faster than the industry average of 40.9%. Since the same quarter one year prior, revenues slightly dropped by 9.1%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • Compared to other companies in the Biotechnology industry and the overall market, MACROGENICS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • Looking at where the stock is today compared to one year ago, we find that it is higher, and it has outperformed the rise in the S&P 500 over the same period, despite the company's weak earnings results. Regardless of the rise in share value over the previous year, we feel that the risks involved in investing in this stock do not compensate for any future upside potential.

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