NEW YORK (TheStreet) -- NeuroMetrix (NURO) stock is surging by 6.09% to $2.44 on heavy trading volume on Tuesday morning, after the commercial launch of the company's diabetic neuropathy test in Mexico.
The Waltham, MA-based healthcare company focuses on technology and tests for chronic pain, nerve diseases, and sleep disorders.
The test, known as DPNCheck, will be used by one of Mexico's six major government healthcare institutions, the company said in a statement on Tuesday.
About 12% of the adult population in Mexico is diagnosed with type 2 diabetes, which is a chronic condition that affects how the body processes sugar. It is the leading cause of death in Mexico, according to NeuroMetrix.
"Mexico is a very important component of our international strategy for DPNCheck and we believe this initial sale will help accelerate Scienta Farma's efforts to expand DPNCheck adoption within the other major government healthcare institutions," Michael MacDonald, NeuroMetrix SVP of commercial operations, said in a statement on Tuesday.
So far today, 2.6 million shares of NeuroMetrix have traded, versus its 30-day average of about 52,000 shares.
Separately, recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. TheStreet Ratings has this to say about the recommendation:
We rate NEUROMETRIX INC as a Sell with a ratings score of D-. This is driven by a few notable weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, weak operating cash flow and generally disappointing historical performance in the stock itself.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- 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 Health Care Equipment & Supplies industry. The net income has significantly decreased by 119.2% when compared to the same quarter one year ago, falling from -$1.46 million to -$3.20 million.
- Net operating cash flow has significantly decreased to -$3.43 million or 79.63% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 63.49%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 36.84% compared to the year-earlier 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.
- 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 Health Care Equipment & Supplies industry and the overall market, NEUROMETRIX INC's return on equity significantly trails that of both the industry average and the S&P 500.
- 48.73% is the gross profit margin for NEUROMETRIX INC which we consider to be strong. Regardless of NURO's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, NURO's net profit margin of -155.98% significantly underperformed when compared to the industry average.
- You can view the full analysis from the report here: NURO