Isis Pharmaceuticals Stock Upgraded (ISIS)

NEW YORK (TheStreet) -- Isis Pharmaceuticals (Nasdaq:ISIS) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance and increase in net income. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity and poor profit margins.

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Highlights from the ratings report include:

• ISIS's very impressive revenue growth greatly exceeded the industry average of 6.8%. Since the same quarter one year prior, revenues leaped by 90.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
• Powered by its strong earnings growth of 94.44% and other important driving factors, this stock has surged by 66.12% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
• ISIS PHARMACEUTICALS INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, ISIS PHARMACEUTICALS INC reported poor results of -$0.85 versus -$0.62 in the prior year. This year, the market expects an improvement in earnings (-$0.79 versus -$0.85).
• The gross profit margin for ISIS PHARMACEUTICALS INC is currently extremely low, coming in at 7.80%. Despite the low profit margin, it has increased significantly from the same period last year. Despite the mixed results of the gross profit margin, ISIS's net profit margin of -2.50% significantly underperformed when compared to the industry average.
• Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Biotechnology industry and the overall market, ISIS PHARMACEUTICALS INC's return on equity significantly trails that of both the industry average and the S&P 500.

Isis Pharmaceuticals, Inc. engages in the discovery and development of antisense drugs using antisense drug discovery platform. Its product pipeline comprises 26 drugs to primarily treat cardiovascular, metabolic, severe, and rare diseases, as well as cancer. Isis has a market cap of $1.21 billion and is part of the health care sector and drugs industry. Shares are up 67.5% year to date as of the close of trading on Tuesday.

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

-- Written by a member of TheStreet Ratings Staff

TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

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