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Neurocrine Biosciences Inc. Stock Downgraded (NBIX)

NEW YORK ( TheStreet) -- Neurocrine Biosciences (Nasdaq: NBIX) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, notable return on equity and solid stock price performance. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, poor profit margins and feeble growth in the company's earnings per share.

Highlights from the ratings report include:

  • NBIX has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Biotechnology industry and the overall market, NEUROCRINE BIOSCIENCES INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period, despite the company's weak earnings results. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Biotechnology industry. The net income has significantly decreased by 46.5% when compared to the same quarter one year ago, falling from $2.49 million to $1.33 million.
  • The gross profit margin for NEUROCRINE BIOSCIENCES INC is currently extremely low, coming in at 4.00%. It has decreased significantly from the same period last year. Along with this, the net profit margin of 12.00% significantly trails the industry average.
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Neurocrine Biosciences, Inc. engages in the discovery, development, and commercialization of drugs for the treatment of neurological and endocrine-related diseases and disorders in the United States. The company has a P/E ratio of 14, above the average drugs industry P/E ratio of 11.6 and below the S&P 500 P/E ratio of 17.7. Neurocrine has a market cap of $447.6 million and is part of the health care sector and drugs industry. Shares are up 10.2% year to date as of the close of trading on Friday.

You can view the full Neurocrine Ratings Report or get investment ideas from our investment research center.
-- Written by a member of TheStreet Ratings Staff

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