NEW YORK ( TheStreet) -- Transition Therapeutics (Nasdaq: TTHI) has been downgraded by TheStreet Ratings from hold to sell. The company's weaknesses can be seen in multiple areas, such as its generally disappointing historical performance in the stock itself and poor profit margins.

Highlights from the ratings report include:
  • The net income growth from the same quarter one year ago has exceeded that of the Biotechnology industry average, but is less than that of the S&P 500. The net income increased by 1.0% when compared to the same quarter one year prior, going from -$3.06 million to -$3.03 million.
  • TRANSITION THERAPEUTICS INC reported flat earnings per share in the most recent quarter. This company has not demonstrated a clear trend in earnings over the past two years, making it difficult to accurately predict earnings for the coming year. During the past fiscal year, TRANSITION THERAPEUTICS INC continued to lose money by earning -$0.83 versus -$0.97 in the prior year.
  • TTHI, with its very weak revenue results, has greatly underperformed against the industry average of 6.9%. Since the same quarter one year prior, revenues plummeted by 100.0%. Weakness in the company's revenue seems to not be hurting the bottom line, shown by stable earnings per share.
  • The gross profit margin for TRANSITION THERAPEUTICS INC is currently extremely low, coming in at 0.00%. Despite the low profit margin, it has increased significantly from the same period last year.
  • TTHI has underperformed the S&P 500 Index, declining 17.45% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.

Transition Therapeutics Inc., a biopharmaceutical company, develops novel therapeutics for various disease indications primarily in Canada. The company has a P/E ratio of 5.6, above the average drugs industry P/E ratio of 5.3 and below the S&P 500 P/E ratio of 17.7. Transition has a market cap of $72.9 million and is part of the health care sector and drugs industry. Shares are up 63.4% year to date as of the close of trading on Friday.

You can view the full Transition Ratings Report or get investment ideas from our investment research center.
null

If you liked this article you might like

5 Stocks Under $10 Set to Soar

5 Stocks Under $10 Set to Soar

Transition Therapeutics (TTHI) Stock Climbs on Positive Alzheimer Treatment Data

5 Stocks Under $10 Set to Soar

2 Biotech Stocks Under $10 Triggering Breakouts

5 Stocks Under $10 to Trade for Breakouts