NEW YORK (TheStreet) -- BioAmber (BIOA - Get Report) shares are down 12% to $12.50 in after-hours trading on Tuesday after announcing a public offering of 2.8 million shares of common stock in an effort to raise capital for "general corporate purposes."
Credit Suisse (CS - Get Report) and Canaccord Genuity (CCORF) are acting as joint book runners for the offering.
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TheStreet Ratings team rates BIOAMBER INC as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:
"We rate BIOAMBER INC (BIOA) a SELL. This is driven by some concerns, 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, poor profit margins 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 Chemicals industry. The net income has significantly decreased by 109.6% when compared to the same quarter one year ago, falling from -$9.50 million to -$19.91 million.
- The gross profit margin for BIOAMBER INC is rather low; currently it is at 20.23%. It has decreased significantly from the same period last year. Along with this, the net profit margin of -5672.64% is significantly below that of the industry average.
- BIOAMBER INC 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. 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, BIOAMBER INC continued to lose money by earning -$1.80 versus -$2.14 in the prior year. For the next year, the market is expecting a contraction of 2.0% in earnings (-$1.84 versus -$1.80).
- 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 Chemicals industry and the overall market, BIOAMBER INC's return on equity significantly trails that of both the industry average and the S&P 500.
- Net operating cash flow has significantly increased by 65.40% to -$4.87 million when compared to the same quarter last year. In addition, BIOAMBER INC has also vastly surpassed the industry average cash flow growth rate of 0.29%.
- You can view the full analysis from the report here: BIOA Ratings Report