NEW YORK (TheStreet) -- Intermune (ITMN) shares are up 5.9% to $34.75 on Monday, continuing to climb following the release of the company's first quarter earnings results last week.
The biotech company reported a loss of -60 cents per diluted share during the quarter, 2 cents better than analysts had expected.
Revenue rose 188.5% from the year ago period to $30.3 million, beating analysts consensus estimates of $28.1 million.
TheStreet Ratings team rates INTERMUNE INC as a Sell with a ratings score of D-. TheStreet Ratings Team has this to say about their recommendation:
"We rate INTERMUNE INC (ITMN) a SELL. This is driven by several weaknesses, 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. Among the areas we feel are negative, one of the most important has been generally deteriorating net income."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed against the S&P 500 and did not exceed that of the Biotechnology industry. The net income has decreased by 7.6% when compared to the same quarter one year ago, dropping from -$49.88 million to -$53.65 million.
- 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 Biotechnology industry and the overall market, INTERMUNE INC's return on equity significantly trails that of both the industry average and the S&P 500.
- ITMN's debt-to-equity ratio of 0.69 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further.
- The gross profit margin for INTERMUNE INC is currently very high, coming in at 88.88%. 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 -177.20% is in-line with the industry average.
- Investors have driven up the company's shares by 259.32% over the past year, a rise that has exceeded that of the S&P 500 Index. Regarding the future course of this stock, we feel that the risks involved in investing in ITMN do not compensate for any future upside potential, despite the fact that it has seen nice gains over the past 12 months.
- You can view the full analysis from the report here: ITMN Ratings Report