Exelixis Inc. Stock Upgraded (EXEL)
NEW YORK (
)
-- Exelixis
(Nasdaq:
) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its notable return on equity, robust revenue growth and expanding profit margins. However, as a counter to these strengths, we find that the stock has had a generally disappointing performance in the past year.
Highlights from the ratings report include:
- Compared to other companies in the Biotechnology industry and the overall market, EXELIXIS INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
- EXEL's very impressive revenue growth greatly exceeded the industry average of 3.3%. Since the same quarter one year prior, revenues leaped by 128.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Biotechnology industry. The net income increased by 359.1% when compared to the same quarter one year prior, rising from -$17.87 million to $46.30 million.
- EXELIXIS INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, EXELIXIS INC turned its bottom line around by earning $0.54 versus -$0.85 in the prior year. For the next year, the market is expecting a contraction of 306.5% in earnings (-$1.12 versus $0.54).
- EXEL'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 41.93%, 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.
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Exelixis, Inc., a biotechnology company, develops small molecule therapies for the treatment of cancer. The company has a P/E ratio of 87.7, below the average drugs industry P/E ratio of 163.7 and above the S&P 500 P/E ratio of 17.7. Exelixis has a market cap of $636.8 million and is part of the
sector and
industry. Shares are up 29.7% year to date as of the close of trading on Friday.
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-- Written by a member of TheStreet RatingsStaff
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