NEW YORK (TheStreet) -- Shares of Durect Corp. (DRRX) - Get DURECT Corporation Report are up 9.55% to $1.72 after it announced late Thursday it secured $20 million in debt financing as part of its loan agreement with Oxford Finance LLC.
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Separately, TheStreet Ratings team rates DURECT CORP as a Sell with a ratings score of D-. TheStreet Ratings Team has this to say about their recommendation:
"We rate DURECT CORP (DRRX) a SELL. This is driven by some concerns, 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. Among the areas we feel are negative, one of the most important has been an overall disappointing return on equity."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Pharmaceuticals industry and the overall market, DURECT CORP's return on equity significantly trails that of both the industry average and the S&P 500.
- DURECT CORP has improved earnings per share by 40.0% 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, DURECT CORP swung to a loss, reporting -$0.21 versus $0.19 in the prior year. This year, the market expects an improvement in earnings (-$0.17 versus -$0.21).
- The net income growth from the same quarter one year ago has significantly exceeded that of the Pharmaceuticals industry average, but is less than that of the S&P 500. The net income increased by 30.5% when compared to the same quarter one year prior, rising from -$5.18 million to -$3.60 million.
- Net operating cash flow has increased to -$2.71 million or 19.63% when compared to the same quarter last year. In addition, DURECT CORP has also modestly surpassed the industry average cash flow growth rate of 10.66%.
- This stock has increased by 81.92% 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 DRRX do not compensate for any future upside potential, despite the fact that it has seen nice gains over the past 12 months.
- You can view the full analysis from the report here: DRRX Ratings Report