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NEW YORK (TheStreet) -- Merus Labs International Inc (MSLI) has been downgraded by TheStreet Ratings from Hold to Sell with a ratings score of D+. TheStreet Ratings Team has this to say about their recommendation:
"We rate MERUS LABS INTERNATIONAL INC (MSLI) a SELL. This is driven by a number of negative factors, 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 area that we feel has been the company's primary weakness has been its relatively poor performance when compared with the S&P 500 during the past year."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- This stock has managed to decline in share value by 1.30% over the past twelve months. Turning our attention to the future direction of the stock, we do not believe this stock offers ample reward opportunity to compensate for the risks, despite the fact that it rose over the past year.
- 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 Pharmaceuticals industry and the overall market, MERUS LABS INTERNATIONAL INC's return on equity significantly trails that of both the industry average and the S&P 500.
- The gross profit margin for MERUS LABS INTERNATIONAL INC is currently very high, coming in at 80.97%. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, MSLI's net profit margin of -2.39% significantly underperformed when compared to the industry average.
- MERUS LABS INTERNATIONAL INC has shown no change in earnings for its most recently reported quarter when compared with the same quarter a year earlier. This company has not demonstrated a clear trend in earnings over the past 2 years, making it difficult to accurately predict earnings for the coming year. During the past fiscal year, MERUS LABS INTERNATIONAL INC continued to lose money by earning -$0.05 versus -$0.70 in the prior year.
- Regardless of the drop in revenue, the company managed to outperform against the industry average of 8.5%. Since the same quarter one year prior, revenues slightly dropped by 4.4%. Weakness in the company's revenue seems to not be hurting the bottom line, shown by stable earnings per share.
- You can view the full analysis from the report here: MSLI Ratings Report