Perilous Reversal Stock: Biocryst Pharmaceuticals (BCRX)

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

  • BCRX has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $12.8 million.
  • BCRX has traded 83,986 shares today.
  • BCRX is down 3.2% today.
  • BCRX was up 6.9% yesterday.

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More details on BCRX:

BioCryst Pharmaceuticals, Inc., a biotechnology company, designs, optimizes, and develops small molecule pharmaceuticals that block key enzymes involved in the pathogenesis of diseases. Currently there are 8 analysts that rate Biocryst Pharmaceuticals a buy, 1 analyst rates it a sell, and 1 rates it a hold.

The average volume for Biocryst Pharmaceuticals has been 1.3 million shares per day over the past 30 days. Biocryst has a market cap of $799.8 million and is part of the health care sector and drugs industry. The stock has a beta of 4.96 and a short float of 19.7% with 9.09 days to cover. Shares are up 45.7% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Biocryst Pharmaceuticals as a sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income and weak operating cash flow.

Highlights from the ratings report include:
  • The company, on the basis of change in net income from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and greatly underperformed compared to the Biotechnology industry average. The net income has decreased by 9.1% when compared to the same quarter one year ago, dropping from -$8.00 million to -$8.73 million.
  • Net operating cash flow has declined marginally to -$8.60 million or 8.55% 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 company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Biotechnology industry and the overall market, BIOCRYST PHARMACEUTICALS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • BIOCRYST PHARMACEUTICALS INC has improved earnings per share by 14.3% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, BIOCRYST PHARMACEUTICALS INC continued to lose money by earning -$0.55 versus -$0.79 in the prior year. For the next year, the market is expecting a contraction of 34.5% in earnings (-$0.74 versus -$0.55).
  • Investors have driven up the company's shares by 57.97% over the past year, a rise that has exceeded that of the S&P 500 Index. Regarding the future course of this stock, we feel that the risks involved in investing in BCRX do not compensate for any future upside potential, despite the fact that it has seen nice gains over the past 12 months.

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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