Trade-Ideas: Revance Therapeutics (RVNC) Is Today's Strong On High Relative Volume 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 Revance Therapeutics ( RVNC) as a strong on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Revance Therapeutics as such a stock due to the following factors:

  • RVNC has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $5.1 million.
  • RVNC has traded 70,677 shares today.
  • RVNC is trading at 8.49 times the normal volume for the stock at this time of day.
  • RVNC is trading at a new high 3.09% above yesterday's close.

'Strong on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as M&A events, material stock news, analyst upgrades, insider buying, buying from 'superinvestors,' or that hedge funds and momentum traders are piling into a stock ahead of a catalyst. Regardless of the impetus behind the price and volume action, when a stock moves with strength and volume it can indicate the start of a new trend on which early investors can capitalize. In the event of a well-timed trading opportunity, combining technical indicators with fundamental trends and a disciplined trading methodology should help you take the first steps towards investment success.

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More details on RVNC:

Revance Therapeutics, Inc., a clinical-stage specialty biopharmaceutical company, focuses on the development, manufacture, and commercialization of novel botulinum toxin products for various aesthetic and therapeutic indications. Currently there are 3 analysts that rate Revance Therapeutics a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for Revance Therapeutics has been 137,800 shares per day over the past 30 days. Revance has a market cap of $485.7 million and is part of the health care sector and drugs industry. Shares are up 19.8% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Revance Therapeutics as a hold. The company's strengths can be seen in multiple areas, such as its increase in net income, largely solid financial position with reasonable debt levels by most measures and notable return on equity. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself and feeble growth in the company's earnings per share.

Highlights from the ratings report include:
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Pharmaceuticals industry average. The net income increased by 28.1% when compared to the same quarter one year prior, rising from -$21.43 million to -$15.40 million.
  • RVNC's debt-to-equity ratio is very low at 0.01 and is currently below that of the industry average, implying that there has been very successful management of debt levels.
  • Compared to other companies in the Pharmaceuticals industry and the overall market, REVANCE THERAPEUTICS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • REVANCE THERAPEUTICS INC has improved earnings per share by 46.3% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, REVANCE THERAPEUTICS INC reported poor results of -$3.10 versus -$0.57 in the prior year. For the next year, the market is expecting a contraction of 8.4% in earnings (-$3.36 versus -$3.10).
  • RVNC's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 34.57%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.

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