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Vical Incorporated Stock Downgraded (VICL)

Editor's Note: 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.

NEW YORK ( TheStreet) -- Vical Incorporated (Nasdaq: VICL) has been downgraded by TheStreet Ratings from hold to sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share.

  • EXCLUSIVE OFFER: Jim Cramer's Protégé, Dave Peltier, only buys Stocks Under $10 that he thinks could potentially double. See what he's trading today with a 14-day FREE pass.

Highlights from the ratings report include:

  • 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 147.0% when compared to the same quarter one year ago, falling from $16.43 million to -$7.73 million.
  • 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, VICAL INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The share price of VICAL INC has not done very well: it is down 12.26% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. 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.
  • VICAL INC has exprienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, VICAL INC continued to lose money by earning -$0.11 versus -$0.51 in the prior year. For the next year, the market is expecting a contraction of 154.5% in earnings (-$0.28 versus -$0.11).
  • VICL, with its very weak revenue results, has greatly underperformed against the industry average of 6.2%. Since the same quarter one year prior, revenues plummeted by 91.8%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
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Vical Incorporated engages in the research and development of biopharmaceutical products based on its deoxyribonucleic acid (DNA) delivery technologies for the prevention and treatment of serious or life-threatening diseases. The company has a P/E ratio of 68.8, above the S&P 500 P/E ratio of 17.7. Vical has a market cap of $296 million and is part of the health care sector and drugs industry. Shares are down 22% year to date as of the close of trading on Thursday.

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

-- Written by a member of TheStreet Ratings Staff

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