NEW YORK (TheStreet) -- Nanosphere (NSPH) shares are skyrocketing 10.52% to $2.98 Tuesday morning after the company received clearance from the Food and Drug Administration for its flexible respiratory pathogens test.
Called Verigene Respiratory Pathogens Flex Nucleic Acid Test (RP Flex), this is the first of its kind, the company stated.
"The demand and need for respiratory pathogen testing varies by season, geography, epidemiology and patient demographics," said Paul Granato, director of microbiology at Laboratory Alliance of Central New York.
The Verigene RP Flex helps to reduce health care costs overall since it gives labors the opportunity to choose and pay for only the microbial targets ordered for each patient sample, the company added.
Based in Northbrook, IL, Nanosphere develops, manufactures, and markets molecular diagnostic tests that can lead to earlier disease detection, optimal patient treatment, and enhanced healthcare economics.
Separately, TheStreet Ratings team rates NANOSPHERE INC as a Sell with a ratings score of D-. TheStreet Ratings Team has this to say about their recommendation:
"We rate NANOSPHERE INC (NSPH) a SELL. This is driven by a few notable weaknesses, 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 disappointing return on equity and generally disappointing historical performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Biotechnology industry and the overall market, NANOSPHERE INC's return on equity significantly trails that of both the industry average and the S&P 500.
- NSPH'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 82.59%, 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.
- NSPH's debt-to-equity ratio of 0.66 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. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 1.20 is sturdy.
- The gross profit margin for NANOSPHERE INC is rather high; currently it is at 57.59%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of -182.15% is in-line with the industry average.
- Net operating cash flow has increased to -$8.05 million or 20.41% when compared to the same quarter last year. In addition, NANOSPHERE INC has also modestly surpassed the industry average cash flow growth rate of 14.64%.
- You can view the full analysis from the report here: NSPH Ratings Report