Sarepta Therapeutics (SRPT) Showing Signs Of Perilous Reversal Today

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

  • SRPT has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $35.6 million.
  • SRPT has traded 641,640 shares today.
  • SRPT is down 3.1% today.
  • SRPT was up 5.1% yesterday.

EXCLUSIVE OFFER: Get the inside scoop on opportunities in SRPT with the Ticky from Trade-Ideas. See the FREE profile for SRPT NOW at Trade-Ideas

More details on SRPT:

Sarepta Therapeutics, Inc., a biopharmaceutical company, focuses on the discovery and development of RNA-based therapeutics for the treatment of rare, infectious, and other diseases. Currently there are 8 analysts that rate Sarepta Therapeutics a buy, no analysts rate it a sell, and 9 rate it a hold.

The average volume for Sarepta Therapeutics has been 1.4 million shares per day over the past 30 days. Sarepta has a market cap of $1.1 billion and is part of the health care sector and drugs industry. The stock has a beta of 0.30 and a short float of 33.2% with 11.50 days to cover. Shares are up 84.6% year-to-date as of the close of trading on Friday.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.

TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Sarepta Therapeutics as a sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, weak operating cash flow, feeble growth in its earnings per share and generally disappointing historical performance in the stock itself.

Highlights from the ratings report include:
  • 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 117.7% when compared to the same quarter one year ago, falling from -$28.27 million to -$61.56 million.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Biotechnology industry and the overall market, SAREPTA THERAPEUTICS 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 -$43.35 million or 53.36% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • SAREPTA THERAPEUTICS 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. Stable earnings per share over the past year indicate the company has managed its earnings and share float. We anticipate this stability to falter in the coming year and, in turn, the company to deliver lower earnings per share than prior full year. During the past fiscal year, SAREPTA THERAPEUTICS INC's EPS of -$3.39 remained unchanged from the prior years' EPS of -$3.39. For the next year, the market is expecting a contraction of 46.3% in earnings (-$4.96 versus -$3.39).
  • The share price of SAREPTA THERAPEUTICS INC has not done very well: it is down 22.22% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.

More from Markets

Trump Takes Aim at Auto Imports; Markets End Mixed -- ICYMI

Trump Takes Aim at Auto Imports; Markets End Mixed -- ICYMI

Video: What Oprah's Content Partnership With Apple Means for the Rest of Tech

Video: What Oprah's Content Partnership With Apple Means for the Rest of Tech

REPLAY: Jim Cramer on the Markets, Oil, Starbucks, Tesla, Okta and Red Hat

REPLAY: Jim Cramer on the Markets, Oil, Starbucks, Tesla, Okta and Red Hat

Flashback Friday: The Market Movers

Flashback Friday: The Market Movers

OPEC Deal Doesn't Boost Production Enough to Drive Down Crude, Gasoline Prices

OPEC Deal Doesn't Boost Production Enough to Drive Down Crude, Gasoline Prices