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Rigel Pharmaceuticals Inc. Stock Downgraded (RIGL)

NEW YORK ( TheStreet) -- Rigel Pharmaceuticals (Nasdaq: RIGL) has been downgraded by TheStreet Ratings from hold to sell. The company's weaknesses can be seen in multiple areas, such as its generally disappointing historical performance in the stock itself and poor profit margins.

Highlights from the ratings report include:

  • RIGL's debt-to-equity ratio is very low at 0.00 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 15.65, which clearly demonstrates the ability to cover short-term cash needs.
  • RIGL, with its very weak revenue results, has greatly underperformed against the industry average of 3.2%. Since the same quarter one year prior, revenues plummeted by 100.0%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • RIGEL PHARMACEUTICALS INC has improved earnings per share by 31.3% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, RIGEL PHARMACEUTICALS INC turned its bottom line around by earning $0.71 versus -$2.81 in the prior year. For the next year, the market is expecting a contraction of 321.1% in earnings (-$1.57 versus $0.71).
  • The gross profit margin for RIGEL PHARMACEUTICALS INC is currently extremely low, coming in at 0.00%. Despite the low profit margin, it has increased significantly from the same period last year.
  • RIGL has underperformed the S&P 500 Index, declining 8.66% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.

Rigel Pharmaceuticals, Inc., a clinical-stage drug development company, engages in the discovery and development of small-molecule drugs for the treatment of inflammatory/autoimmune diseases, as well as for certain cancers and metabolic diseases. The company has a P/E ratio of 10, below the average drugs industry P/E ratio of 10.1 and below the S&P 500 P/E ratio of 21.9. Rigel has a market cap of $381.1 million and is part of the health care sector and drugs industry. Shares are down 6.1% year to date as of the close of trading on Friday.

You can view the full Rigel Ratings Report or get investment ideas from our investment research center.

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