Wednesday, July 15, 2020

B. Riley FBR slashes price target on DURECT Corporation [DRRX] as Gilead terminates License Agreement

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DURECT Corporation [NASDAQ: DRRX] closed the trading session at $2.45 on 06/26/20. On June 26, DURECT announced that Gilead Sciences, Inc., (Gilead) is terminating the License Agreement (dated July 19, 2019) and R&D agreement between Gilead and DURECT. The agreement between both the firms was regarding the commercialization of a long-acting injectable HIV investigational product that used the DURECT’s SABER® technology. The agreement between both the firms is set to end on December 22, 2020.

With the effect of the termination, DURECT expects to obtain the deferred revenue (non-cash financial item) that is around  $23.1 million in the Q2 of this year, linked with the receipt of the advance license and development payment received back in 2019 from Gilead.

The day’s price range saw the stock hit a low of $2.41, while the highest price level was $2.78. The stocks have a year to date performance of -35.53 percent and weekly performance of 2.08 percent. The stock has been moved at -18.33 percent over the last six months. The stock has performed 2.94 percent around the most recent 30 days and changed 57.05 percent over the most recent 3-months.

If compared to the average trading volume of 1.08M shares, DRRX reached to a volume of 25352892 in the most recent trading day, which is why market watchdogs consider the stock to be active.

Here’s what leading stock market gurus have to say about DURECT Corporation [DRRX]:

B. Riley FBR have made an estimate for DURECT Corporation shares, keeping their opinion on the stock as Buy, with their previous recommendation back on January 31, 2020. The new note on the price target was released on November 18, 2019, representing the official price target for DURECT Corporation stock. Previously, the target price had yet another raise to $5, while Cantor Fitzgerald analysts kept an Overweight rating on DRRX stock.

The Average True Range (ATR) for DURECT Corporation is set at 0.23, with the Price to Sales ratio for DRRX stock in the period of the last 12 months amounting to 19.18. The Price to Book ratio for the last quarter was 35.00, with the Price to Cash per share for the same quarter was set at 0.24. Price to Free Cash Flow for DRRX in the course of the last twelve months was 146.22 with Quick ratio for the last quarter at 2.40.

DRRX stock trade performance evaluation

DURECT Corporation [DRRX] gain into the green zone at the end of the last week, gaining into a positive trend and gaining by 2.08. With this latest performance, DRRX shares gained by 2.94% in over the last four-week period, additionally sinking by -18.33% over the last 6 months – not to mention a rise of 260.29% in the past year of trading.

Overbought and oversold stocks can be easily traced with the Relative Strength Index (RSI), where an RSI result of over 70 would be overbought, and any rate below 30 would indicate oversold conditions. An RSI rate of 50 would represent a neutral market momentum. The current RSI for DRRX stock in for the last two-week period is set at 51.98, with the RSI for the last a single of trading hit 51.99, and the three-weeks RSI is set at 52.82 for DURECT Corporation [DRRX]. The present Moving Average for the last 50 days of trading for this stock 2.31, while it was recorded at 2.46 for the last single week of trading, and 2.05 for the last 200 days.

DURECT Corporation [DRRX]: An insightful look at the core fundamentals

Operating Margin for any stock indicates how profitable investing would be, and DURECT Corporation [DRRX] shares currently have an operating margin of -64.78 and a Gross Margin at +85.99. DURECT Corporation’s Net Margin is presently recorded at -69.60.

Return on Total Capital for DRRX is now -42.46, given the latest momentum, and Return on Invested Capital for the company is -46.68. Return on Equity for this stock declined to -96.02, with Return on Assets sitting at -30.26. When it comes to the capital structure of this company, DURECT Corporation [DRRX] has a Total Debt to Total Equity ratio set at 117.33. Additionally, DRRX Total Debt to Total Capital is recorded at 53.99, with Total Debt to Total Assets ending up at 31.18. Long-Term Debt to Equity for the company is recorded at 108.39, with the Long-Term Debt to Total Capital now at 49.88.

Reflecting on the efficiency of the workforce at the company, DURECT Corporation [DRRX] managed to generate an average of -$228,644 per employee. Receivables Turnover for the company is 14.53 with a Total Asset Turnover recorded at a value of 0.43.DURECT Corporation’s liquidity data is similarly interesting compelling, with a Quick Ratio of 2.40 and a Current Ratio set at 2.60.

Earnings per share (EPS) analysis for DURECT Corporation [DRRX] stock

With the latest financial reports released by the company, DURECT Corporation posted -0.04/share EPS, while the average EPS was predicted by analysts to be reported at -0.04/share. The progress of the company may be observed through the prism of EPS growth rate, while Wall Street analysts are focusing on predicting the 5-year EPS growth rate for DRRX. When it comes to the mentioned value, analysts are expecting to see the 5-year EPS growth rate for DURECT Corporation go to 16.00%.

DURECT Corporation [DRRX]: Insider Ownership positions

There are presently around $240 million, or 50.40% of DRRX stock, in the hands of institutional investors. The top three institutional holders of DRRX stocks are: BLEICHROEDER LP with ownership of 26,704,044, which is approximately 0.859% of the company’s market cap and around 3.30% of the total institutional ownership; LION POINT CAPITAL, LP, holding 19,492,459 shares of the stock with an approximate value of $47.76 million in DRRX stocks shares; and VANGUARD GROUP INC, currently with $21.95 million in DRRX stock with ownership of nearly 8.977% of the company’s market capitalization.

Positions in DURECT Corporation stocks held by institutional investors increased at the end of May and at the time of the May reporting period, where 47 institutional holders increased their position in DURECT Corporation [NASDAQ:DRRX] by around 10,360,223 shares. Additionally, 33 investors decreased positions by around 4,438,650 shares, while 15 investors held positions by with 83,066,473 shares. The mentioned changes placed institutional holdings at 97,865,346 shares, according to the latest SEC report filing. DRRX stock had 19 new institutional investments in for a total of 2,400,502 shares, while 13 institutional investors sold positions of 1,591,422 shares during the same period.

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