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.

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

  • NKTR has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $13.7 million.
  • NKTR traded 137,237 shares today in the pre-market hours as of 8:26 AM, representing 12.5% of its average daily volume.

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More details on NKTR:

Nektar Therapeutics, a clinical-stage biopharmaceutical company, develops drug candidates that utilize its PEGylation and polymer conjugate technology platforms in the United States. Currently there are 7 analysts that rate Nektar Therapeutics a buy, 1 analyst rates it a sell, and none rate it a hold.

The average volume for Nektar Therapeutics has been 992,700 shares per day over the past 30 days. Nektar has a market cap of $1.8 billion and is part of the health care sector and drugs industry. The stock has a beta of 1.34 and a short float of 12.5% with 11.70 days to cover. Shares are down 9.2% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Nektar Therapeutics as a sell. The company's weaknesses can be seen in multiple areas, such as its weak operating cash flow and generally high debt management risk.

Highlights from the ratings report include:
  • Net operating cash flow has significantly decreased to -$24.63 million or 145.91% 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 debt-to-equity ratio is very high at 6.99 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Despite the company's weak debt-to-equity ratio, the company has managed to keep a very strong quick ratio of 4.16, which shows the ability to cover short-term cash needs.
  • In its most recent trading session, NKTR has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. Turning our attention to the future direction of the stock, we do not believe this stock offers ample reward opportunity to compensate for the risks, despite the fact that it rose over the past year.
  • NEKTAR THERAPEUTICS has improved earnings per share by 14.6% 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, NEKTAR THERAPEUTICS continued to lose money by earning -$0.45 versus -$1.40 in the prior year. For the next year, the market is expecting a contraction of 3.3% in earnings (-$0.47 versus -$0.45).
  • NKTR, with its decline in revenue, underperformed when compared the industry average of 10.3%. Since the same quarter one year prior, revenues fell by 37.2%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.

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