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) -- ACADIA Pharmaceuticals (Nasdaq:ACAD) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and solid stock price performance. However, as a counter to these strengths, we also find weaknesses including weak operating cash flow, poor profit margins and disappointing return on equity.
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- ACAD's very impressive revenue growth greatly exceeded the industry average of 5.4%. Since the same quarter one year prior, revenues leaped by 495.5%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- ACAD'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.
- ACADIA 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, ACADIA PHARMACEUTICALS INC swung to a loss, reporting -$0.44 versus $0.38 in the prior year. This year, the market expects an improvement in earnings (-$0.37 versus -$0.44).
- The gross profit margin for ACADIA PHARMACEUTICALS INC is currently extremely low, coming in at 10.50%. Despite the low profit margin, it has increased significantly from the same period last year. Despite the mixed results of the gross profit margin, ACAD's net profit margin of -69.10% significantly underperformed when compared to the industry average.
- Net operating cash flow has decreased to -$5.31 million or 27.18% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
-- Written by a member of TheStreet Ratings Staff
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. FREE for a limited time only: Get TheStreet Ratings #1 Stock Report NOW!.
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