NEW YORK (TheStreet) -- Shares of Auxilium Pharmaceutical Inc. (AUXL) are down -15.02% to $23.25 in pre-market trade after the specialty biopharmaceutical company announced that it's reducing its financial guidance for the full year 2014 due primarily to lower-than-expected revenues from Testim testosterone gel.
In the first quarter of 2014, the company expects to record worldwide Testim revenues of about $11 million to $13 million, compared to $45.5 million in the first quarter of 2014
Full-year Testim sales for 2014 are now expected to be less than $85 million.
The company is continuing to finalize the close for the first quarter and will announce its total definitive net revenue, including definitive net revenue for Testim, on its earnings call planned for May 5.
TheStreet Ratings team rates AUXILIUM PHARMA INC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate AUXILIUM PHARMA INC (AUXL) a HOLD. The primary factors that have impacted our rating are mixed some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its solid stock price performance, good cash flow from operations and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, generally higher debt management risk and disappointing return on equity."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Compared to its closing price of one year ago, AUXL's share price has jumped by 73.00%, 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.
- Net operating cash flow has increased to -$11.60 million or 14.77% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -22.12%.
- The gross profit margin for AUXILIUM PHARMA INC is currently very high, coming in at 75.22%. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, AUXL's net profit margin of -19.02% significantly underperformed when compared to the industry average.
- The debt-to-equity ratio is very high at 2.18 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Along with the unfavorable debt-to-equity ratio, AUXL maintains a poor quick ratio of 0.85, which illustrates the inability to avoid short-term cash problems.
- 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 Pharmaceuticals industry and the overall market, AUXILIUM PHARMA INC's return on equity significantly trails that of both the industry average and the S&P 500.
- You can view the full analysis from the report here: AUXL Ratings Report