Wednesday, August 1, 2007

Acorda Therapeutics Inc.

Acorda Therapeutics Inc. is a NASDAQ listed security that has been trading in a range between $2.20 and $26.58 over the past year. With 27,753,930 shares outstanding, a recent price of $18.41 gives a total market capitalization of $502,623,689. While there are certainly larger companies, Acorda Therapeutics Inc. has definitely earned its place in the pack. Last year, Acorda Therapeutics Inc. created $-1.13 in earnings for every share outstanding.

Acorda Therapeutics Inc. is currently priced by the market at 0.00 times last year’s earnings. Many trading multiples around the world are quite attractive these days, but don’t be fooled. A Price to Earnings ratio of 0 simply means that the security didn’t make any money last year.

With a share price under $50 a share and earnings per share below $1 a share, Acorda Therapeutics Inc. is unlikely to be an interesting value proposition. Consistent earnings are the key to high valuations and this security is not on its way.