NEW YORK (TheStreet) -- Alimera Sciences (ALIM) - Get Report shares continue to rally on Monday, trading up 8.4% to $5.34 on heavy trading, after the company announced that it had received FDA approval for its diabetic macular edema treatment, Iluvien.
The disease, which causes blindness due to diabetes, afflicts over 500,000 people in the U.S. alone.
The company said that it expects to begin selling the treatment in the U.S. during the first quarter of 2015.STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.
TheStreet Ratings team rates ALIMERA SCIENCES INC as a Sell with a ratings score of D-. TheStreet Ratings Team has this to say about their recommendation:
"We rate ALIMERA SCIENCES INC (ALIM) 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 disappointing return on equity."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- 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, ALIMERA SCIENCES INC's return on equity significantly trails that of both the industry average and the S&P 500.
- ALIMERA SCIENCES INC reported significant earnings per share improvement in the most recent quarter compared to 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, ALIMERA SCIENCES INC reported poor results of -$1.62 versus -$0.63 in the prior year. This year, the market expects an improvement in earnings (-$1.11 versus -$1.62).
- ALIM's debt-to-equity ratio of 0.68 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. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 10.20 is very high and demonstrates very strong liquidity.
- This stock has increased by 37.53% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the future course of this stock, we feel that the risks involved in investing in ALIM do not compensate for any future upside potential, despite the fact that it has seen nice gains over the past 12 months.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Pharmaceuticals industry. The net income increased by 106.8% when compared to the same quarter one year prior, rising from -$16.36 million to $1.12 million.
- You can view the full analysis from the report here: ALIM Ratings Report