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"We rate PSIVIDA CORP (PSDV) 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 notable return on equity. However, as a counter to these strengths, we find that we feel that the company's cash flow from its operations has been weak overall."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- PSDV's very impressive revenue growth greatly exceeded the industry average of 25.2%. Since the same quarter one year prior, revenues leaped by 4139.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
- PSDV has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 17.20, which clearly demonstrates the ability to cover short-term cash needs.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Life Sciences Tools & Services industry. The net income increased by 657.8% when compared to the same quarter one year prior, rising from -$3.69 million to $20.57 million.
- Net operating cash flow has declined marginally to -$3.99 million or 5.74% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
- You can view the full analysis from the report here: PSDV Ratings Report