Story updated at 9:40 a.m. to reflect market activity.
Pharmacyclics fell -5% to $83.98 in morning trading.
The firm set a price target of $95 for the company. According to RBC Capital analysts, Pharmacyclis is facing potential growth headwinds.
Separately, TheStreet Ratings team rates PHARMACYCLICS INC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate PHARMACYCLICS INC (PCYC) 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 robust revenue growth, largely solid financial position with reasonable debt levels by most measures and notable return on equity. However, as a counter to these strengths, we also find weaknesses including poor profit margins and feeble growth in the company's earnings per share."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- PCYC's very impressive revenue growth greatly exceeded the industry average of 26.2%. Since the same quarter one year prior, revenues leaped by 4094.6%. Growth in the company's revenue appears to have helped boost the earnings per share.
- PCYC 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 7.55, which clearly demonstrates the ability to cover short-term cash needs.
- Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. We feel that the combination of its price rise over the last year and its current price-to-earnings ratio relative to its industry tend to reduce its upside potential.
- PHARMACYCLICS INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, PHARMACYCLICS INC reported lower earnings of $0.80 versus $1.15 in the prior year. For the next year, the market is expecting a contraction of 85.6% in earnings ($0.12 versus $0.80).
- The gross profit margin for PHARMACYCLICS INC is rather low; currently it is at 16.03%. Despite the low profit margin, it has increased significantly from the same period last year. Despite the mixed results of the gross profit margin, PCYC's net profit margin of 15.30% is significantly lower than the industry average.
- You can view the full analysis from the report here: PCYC Ratings Report