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) -- 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 solid stock price performance, largely solid financial position with reasonable debt levels by most measures and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and disappointing return on equity.
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- Compared to its closing price of one year ago, NBIX's share price has jumped by 60.94%, exceeding the performance of the broader market during that same time frame. 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.
- 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. Along with this, the company maintains a quick ratio of 11.40, which clearly demonstrates the ability to cover short-term cash needs.
- NBIX, with its very weak revenue results, has greatly underperformed against the industry average of 12.5%. Since the same quarter one year prior, revenues plummeted by 93.5%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- NEUROCRINE BIOSCIENCES 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. Earnings per share have declined over the last year. We anticipate that this should continue in the coming year. During the past fiscal year, NEUROCRINE BIOSCIENCES INC reported lower earnings of $0.07 versus $0.67 in the prior year. For the next year, the market is expecting a contraction of 1185.7% in earnings (-$0.76 versus $0.07).
- 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 1262.9% when compared to the same quarter one year ago, falling from -$0.89 million to -$12.08 million.
-- Written by a member of TheStreet Ratings Staff
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