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Thursday, October 22, 2020

Is Now the Time to Invest in DURECT Corporation (NASDAQ:DRRX)?

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DURECT Corporation (DRRX) shares are trading at higher $1.97 and the avg recommendation for the stock is Strong Buy.

To add more color to this target, the company’s high over the last year is $3.95 and the low is $0.95. Over the last 52 weeks, DRRX is up 6.49% while the S&P 500 is up 18.10%. The catalyst for this interesting swing was the company’s recent earnings report.

A Notable Earnings Report

In the last quarter, DRRX reported a profit of $24.88 million. DURECT Corporation also saw revenues increase to $25.84 million. In addition, DRRX has free cash flow of -$21.79 million as of 06-2020. The company’s EBITDA came in at $14.83 million which compares well with its peers.

DRRX booked profit margins of -3.70%, its Return on Equity (ROE) is -7.70%, and its Return on Assets is -2.30%. All told, it is clear that, DRRX needs to be on your watchlist.

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Of course, we must look beyond the financials and question how well those numbers represent the sustainable earnings power of the business. Investors need to know how sustainable this current run. DRRX has a short ratio of 8.59 and outstanding shares of 196.87M.

Company Outlook

DRRX has seen increased volume after this news and investors are putting their support behind the value proposition. Traders will also note the company’s earnings per share came in at -0.01. DURECT Corporation DRRX also noted assets of $72.76 million at the end of the last quarter. Investors should also keep an eye on sector updates as DRRX has historically followed its peers on positive news.

All told, DURECT Corporation DRRX has strung together solid data and demonstrated underlying fundamentals. At its current valuation, DRRX represents an interesting risk/reward case. Traders should stay tuned to see if this recent report will push the stock to test recent resistance levels.

DURECT Corporation DRRX is now commanding a market cap of 382.02M and a float of 178.62M. DRRX is increasing its credibility in this sector and that could lead to more upside down the line. Sign-up for continuing coverage on shares of DRRX stock, as well as other hot stock picks, get our free newsletter today and get our next breakout pick!

Disclosure: we hold no position in DRRX, either long or short, and we have not been compensated for this article.

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