NEW YORK (TheStreet) -- Shares of Baxano Surgical Inc. (BAXS) are up 9.75% to $1.13 today after the company announced that it received FDA clearance for its Avance MIS Pedicle Screw System, which may be used as an adjunct to fusion in numerous degenerative and complex spinal pathologies.
TheStreet Ratings team rates BAXANO SURGICAL INC as a Sell with a ratings score of D-. TheStreet Ratings Team has this to say about their recommendation:
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"We rate BAXANO SURGICAL INC (BAXS) a SELL. This is driven by some concerns, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its weak operating cash flow and generally disappointing historical performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Net operating cash flow has decreased to -$6.63 million or 19.12% 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.
- BAXS's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 50.94%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
- 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 Health Care Equipment & Supplies industry and the overall market, BAXANO SURGICAL INC's return on equity significantly trails that of both the industry average and the S&P 500.
- The gross profit margin for BAXANO SURGICAL INC is currently very high, coming in at 79.09%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of -141.66% is in-line with the industry average.
- BAXS's debt-to-equity ratio is very low at 0.23 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.25, which illustrates the ability to avoid short-term cash problems.
- You can view the full analysis from the report here: BAXS Ratings Report