Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.
NEW YORK (
) has been reiterated by TheStreet Ratings as a sell with a ratings score of D- . Among the areas we feel are negative, one of the most important has been poor profit margins.
- ACTIVE STOCK TRADERS: Get trading ideas for stocks under $10 for less than $6/week. Start with a 14-Day Free Trial.
Highlights from the ratings report include:
- The gross profit margin for ARENA PHARMACEUTICALS INC is rather low; currently it is at 19.80%. Despite the low profit margin, it has increased significantly from the same period last year. Despite the mixed results of the gross profit margin, ARNA's net profit margin of -100.60% significantly underperformed when compared to the industry average.
- 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 Biotechnology industry and the overall market, ARENA PHARMACEUTICALS INC's return on equity significantly trails that of both the industry average and the S&P 500.
- The company, on the basis of net income growth from the same quarter one year ago, has significantly underperformed compared to the Biotechnology industry average, but is greater than that of the S&P 500. The net income increased by 3.5% when compared to the same quarter one year prior, going from -$22.91 million to -$22.10 million.
- ARNA's debt-to-equity ratio of 0.70 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 8.77 is very high and demonstrates very strong liquidity.
- Net operating cash flow has increased to -$12.24 million or 37.52% when compared to the same quarter last year. In addition, ARENA PHARMACEUTICALS INC has also vastly surpassed the industry average cash flow growth rate of -99.38%.
Arena Pharmaceuticals, Inc., a clinical-stage biopharmaceutical company, engages in discovering, developing, and commercializing oral drugs that target G protein-coupled receptors in the therapeutic areas of cardiovascular, central nervous system, inflammatory, and metabolic diseases. Arena has a market cap of $1.9 billion and is part of the health care sector and drugs industry. The company has a P/E ratio of -14.6, below the S&P 500 P/E ratio of 17.7. Shares are up 357.8% year to date as of the close of trading on Thursday.
You can view the full
or get investment ideas from our
--Written by a member of TheStreet Ratings Staff.
FREE from Real Money's Jim Cramer: Winners and Losers Election 2012 - Steps to take NOW so you can profit no matter who is in charge!
Free Download Now