NEW YORK (TheStreet) -- Acorda Therapeutics (ACOR) - Get Acorda Therapeutics, Inc. Report shares are up 11.74% to $32.36 in afternoon trading on Tuesday after a U.S. patent review board rejected a review petition brought by hedge fund manager Kyle Bass.
Bass challenged two of the company's patents for its multiple sclerosis treatment Ampyra, but the board said that the petition brought by him did not prove to be compelling.
Bass employs a trading strategy that relies on challenging patents held by pharmaceutical companies and then benefiting from the potential subsequent decline in the stock's price, according to the Wall Street Journal.
TheStreet Ratings team rates ACORDA THERAPEUTICS INC as a Hold with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:
"We rate ACORDA THERAPEUTICS INC (ACOR) 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 expanding profit margins. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, deteriorating net income and disappointing return on equity."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- ACOR's revenue growth has slightly outpaced the industry average of 8.1%. Since the same quarter one year prior, revenues rose by 17.1%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- The current debt-to-equity ratio, 0.53, is low and is below the industry average, implying that there has been successful management of debt levels. Along with this, the company maintains a quick ratio of 2.98, which clearly demonstrates the ability to cover short-term cash needs.
- ACORDA THERAPEUTICS 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. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, ACORDA THERAPEUTICS INC increased its bottom line by earning $0.42 versus $0.39 in the prior year. This year, the market expects an improvement in earnings ($0.70 versus $0.42).
- Net operating cash flow has significantly decreased to $3.25 million or 82.62% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- The share price of ACORDA THERAPEUTICS INC is down 5.47% when compared to where it was trading one year earlier. This reflects both (a) the trend in the overall market as well as (b) the sharp decline in the company's earnings per share. Looking ahead, we do not see anything in this company's numbers that would change the one-year trend. It was down over the last twelve months; and it could be down again in the next twelve. Naturally, a bull or bear market could sway the movement of this stock.
- You can view the full analysis from the report here: ACOR Ratings Report