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Momenta Pharmaceuticals Inc. Stock Downgraded (MNTA)

NEW YORK ( TheStreet) -- Momenta Pharmaceuticals (Nasdaq: MNTA) 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 reasonable valuation levels. 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:

  • MNTA 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, MOMENTA PHARMACEUTICALS 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 103.5% when compared to the same quarter one year ago, falling from $36.26 million to -$1.25 million.
  • The gross profit margin for MOMENTA PHARMACEUTICALS INC is currently extremely low, coming in at 10.20%. It has decreased significantly from the same period last year. Along with this, the net profit margin of -4.30% is significantly below that of the industry average.
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Momenta Pharmaceuticals, Inc., a biotechnology company, specializes in the characterization and process engineering of complex molecules. These complex molecules include proteins; polypeptides; and cell surface polysaccharides, such as heparan-sulfate proteoglycans (HSPGs). The company has a P/E ratio of 3.7, below the average drugs industry P/E ratio of 4.3 and below the S&P 500 P/E ratio of 17.7. Momenta has a market cap of $959.2 million and is part of the health care sector and drugs industry. Shares are down 10.2% year to date as of the close of trading on Friday.

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

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