Analyst Downgrades: TripAdvisor, TrueCar, and Sunesis

Analysts downwardly revised their ratings on TripAdvisor Inc (NASDAQ:TRIP), TrueCar Inc (NASDAQ:TRUE), and Sunesis Pharmaceuticals, Inc. (NASDAQ:SNSS)

Karee Venema
Jul 24, 2015 at 10:07 AM
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Analysts are weighing in on online travel company TripAdvisor Inc (NASDAQ:TRIP), auto pricing issue TrueCar Inc (NASDAQ:TRUE), and drugmaker Sunesis Pharmaceuticals, Inc. (NASDAQ:SNSS). Here's a quick roundup of today's bearish brokerage notes on TRIP, TRUE, and SNSS -- which have all earned a place on the short-sale restricted list.

  • TRIP is down 9% at the open to $84.95, but appears to be finding a foothold atop its 120-day moving average. Today's sell-off is a result of the firm's second-quarter earnings miss and a round of price-target cuts. Specifically, the stock saw its target price reduced at RBC (to $86), Cowen and Company (to $75), and Evercore ISI (to $83). Heading into today's trading, the security had tacked on 25% this year, yet sentiment is skewed toward the skeptical side. More than 14% of TripAdvisor Inc's float is sold short, and 77% of covering analysts maintain a "hold" or "sell" suggestion on the stock.

  • TRUE bottomed at an all-time low of $6.55 out of the gate, after the company issued a profit warning for the current quarter and slashed its full-year revenue forecast.  What's more, a number of brokerage firms lowered their outlooks on the equity. Included in the bunch were J.P. Morgan Securities, which cut its rating to "neutral" from "overweight" and its price target to $12 from $23 -- and Goldman Sachs, which removed TRUE from its "America's Buy" list, downgraded the stock to "neutral" from "buy," and reduced its target price by $9 to $8. Thanks to today's 39% decline to $6.52, the stock is now staring at a 71% year-to-date deficit. Option traders could start jumping ship, too. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), TrueCar Inc's 10-day call/put volume ratio of 16.27 ranks in the 73rd annual percentile. Simply stated, calls have been bought to open over puts at an accelerated clip.

  • News that the Food and Drug Administration (FDA) will not support SNSS' marketing application for its experimental cancer drug, vosaroxin -- saying the company needs to provide more clinical evidence -- was met with a backlash from the brokerage bunch. Cowen and Company, for instance, lowered its outlook to "market perform" from "outperform," while Roth Capital cut its rating to "sell" from "buy" and its price target to $1 from $5.50. Against this backdrop, the stock is down 71.3% at $0.99 -- and fresh off a six-year low of $0.98 -- erasing all of its year-to-date gains. Short-term speculators, meanwhile, have been more put-heavy than usual, per Sunesis Pharmaceuticals, Inc.'s Schaeffer's put/call open interest ratio (SOIR) of 0.50, which ranks higher than 74% of all similar readings taken in the past year.

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