NEW YORK (TheStreet) -- ValeantPharmaceuticals (VRX) stock is down 6.04% to $107.25 in pre-market trading on Monday after the company announced that CEO J. Michael Pearson will be on a medial leave of absence.
Pearson was hospitalized last week for a severe case of pneumonia, the company said.
Valeant has created an Office of the Chief Executive Officer, which includes the company's CFO and other executives.
"The committee will be working closely with the entire management team to ensure that the company continues to operate normally while Mike focuses on his health," Robert Ingram, a lead director of Valeant, said in a statement on Monday. "I am confident that with the vast industry and business knowledge from the management team and the board of directors, we will manage through this period."
Based in Quebec, Valeant is a specialty pharmaceutical company that focuses on developing dermatology, gastrointestinal disorder, eye health, and neurology products.
Separately, recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. TheStreet Ratings has this to say about the recommendation:
We rate VALEANT PHARMACEUTICALS INTL as a Hold with a ratings score of C. 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, good cash flow from operations and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, unimpressive growth in net income and generally higher debt management risk.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth greatly exceeded the industry average of 3.5%. Since the same quarter one year prior, revenues rose by 35.5%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- Net operating cash flow has increased to $736.40 million or 19.02% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -0.44%.
- VALEANT PHARMACEUTICALS INTL has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, VALEANT PHARMACEUTICALS INTL turned its bottom line around by earning $2.67 versus -$2.62 in the prior year. This year, the market expects an improvement in earnings ($10.28 versus $2.67).
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. In comparison to the other companies in the Pharmaceuticals industry and the overall market, VALEANT PHARMACEUTICALS INTL's return on equity is significantly below that of the industry average and is below that of the S&P 500.
- The share price of VALEANT PHARMACEUTICALS INTL has not done very well: it is down 18.23% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. Looking ahead, we do not see anything in this company's numbers that would change the one-year trend. It was down over the last twelve months; and it could be down again in the next twelve. Naturally, a bull or bear market could sway the movement of this stock.
- You can view the full analysis from the report here: VRX