NEW YORK (TheStreet) -- Shares of Pernix Therapeutics Holdings (PTX - Get Report) are up 7.33% to $6.00 after Needham upgraded the specialty pharmaceutical company to "strong buy" from "buy," saying its acquisition of Treximet was a "game changer."
Needham said the migraine drug should substantially increase short-term profitability.
It increased its price target to $10 from $6.30.
TheStreet Ratings team rates PERNIX THERAPEUTICS HOLDINGS as a Sell with a ratings score of D+. TheStreet Ratings Team has this to say about their recommendation:
"We rate PERNIX THERAPEUTICS HOLDINGS (PTX) 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. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity and feeble growth in its earnings per share."
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 when compared to that of the S&P 500 and the Pharmaceuticals industry. The net income has significantly decreased by 298.1% when compared to the same quarter one year ago, falling from -$1.40 million to -$5.57 million.
- 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, PERNIX THERAPEUTICS HOLDINGS's return on equity significantly trails that of both the industry average and the S&P 500.
- PERNIX THERAPEUTICS HOLDINGS has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, PERNIX THERAPEUTICS HOLDINGS reported poor results of -$0.70 versus -$0.05 in the prior year. This year, the market expects an improvement in earnings ($0.01 versus -$0.70).
- Looking at where the stock is today compared to one year ago, we find that it is higher, and it has outperformed the rise in the S&P 500 over the same period, despite the company's weak earnings results. Turning our attention to the future direction of the stock, we do not believe this stock offers ample reward opportunity to compensate for the risks, despite the fact that it rose over the past year.
- PTX's debt-to-equity ratio is very low at 0.17 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Despite the fact that PTX's debt-to-equity ratio is low, the quick ratio, which is currently 0.66, displays a potential problem in covering short-term cash needs.
- You can view the full analysis from the report here: PTX Ratings Report