Trade-Ideas: ACADIA Pharmaceuticals (ACAD) Is Today's Post-Market Leader 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.

Trade-Ideas LLC identified ACADIA Pharmaceuticals ( ACAD) as a post-market leader candidate. In addition to specific proprietary factors, Trade-Ideas identified ACADIA Pharmaceuticals as such a stock due to the following factors:

  • ACAD has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $56.9 million.
  • ACAD is up 2.6% today from today's close.

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More details on ACAD:

ACADIA Pharmaceuticals Inc., a biopharmaceutical company, focuses on the development and commercialization of small molecule drugs that address unmet medical needs in neurological and related central nervous system disorders. Currently there are 8 analysts that rate ACADIA Pharmaceuticals a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for ACADIA Pharmaceuticals has been 2.2 million shares per day over the past 30 days. ACADIA has a market cap of $3.6 billion and is part of the health care sector and drugs industry. Shares are up 12.4% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates ACADIA Pharmaceuticals 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:
  • ACADIA PHARMACEUTICALS 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 two years. We anticipate that this should continue in the coming year. During the past fiscal year, ACADIA PHARMACEUTICALS INC reported poor results of -$0.94 versus -$0.44 in the prior year. For the next year, the market is expecting a contraction of 27.6% in earnings (-$1.20 versus -$0.94).
  • 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 135.4% when compared to the same quarter one year ago, falling from -$12.05 million to -$28.37 million.
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Biotechnology industry and the overall market, ACADIA PHARMACEUTICALS 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 -$17.80 million or 73.41% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • Compared to its closing price of one year ago, ACAD's share price has jumped by 69.74%, exceeding the performance of the broader market during that same time frame. Regarding the future course of this stock, we feel that the risks involved in investing in ACAD do not compensate for any future upside potential, despite the fact that it has seen nice gains over the past 12 months.

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