NEW YORK (TheStreet) -- Endocyte (ECYT - Get Report) shares had coverage initiated with a "neutral" rating by analysts at Citigroup (C - Get Report) with an $8 price target.
The price target represents a 27.5% upside from the company's opening price on Thursday.
Endocyte shares are down -1.1% to $6.20 in early market trading.
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TheStreet Ratings team rates ENDOCYTE INC as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:
"We rate ENDOCYTE INC (ECYT) a SELL. This is driven by a few notable 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 disappointing return on equity, weak operating cash flow and generally disappointing historical performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Pharmaceuticals industry and the overall market, ENDOCYTE INC's return on equity significantly trails that of both the industry average and the S&P 500.
- Net operating cash flow has declined marginally to -$16.59 million or 9.09% 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.
- ECYT'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 53.68%, 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.
- ENDOCYTE INC has improved earnings per share by 18.2% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, ENDOCYTE INC reported poor results of -$0.50 versus -$0.47 in the prior year. This year, the market expects an improvement in earnings (-$0.21 versus -$0.50).
- The net income growth from the same quarter one year ago has exceeded that of the Pharmaceuticals industry average, but is less than that of the S&P 500. The net income increased by 18.7% when compared to the same quarter one year prior, going from -$3.86 million to -$3.14 million.
- You can view the full analysis from the report here: ECYT Ratings Report