NEW YORK ( TheStreet) -- DUSA Pharmaceuticals (Nasdaq: DUSA) has been downgraded by TheStreet Ratings from buy to hold. 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 good cash flow from operations. However, as a counter to these strengths, we find that the growth in the company's net income has been quite unimpressive. Highlights from the ratings report include:
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Biotechnology industry. The net income has significantly decreased by 42.7% when compared to the same quarter one year ago, falling from -$0.42 million to -$0.61 million.
- Compared to its closing price of one year ago, DUSA's share price has jumped by 111.57%, exceeding the performance of the broader market during that same time frame. Looking ahead, however, we cannot assume that the stock's past performance is going to drive future results. Quite to the contrary, its sharp appreciation over the last year is one of the factors that should prompt investors to seek better opportunities elsewhere.
- 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 Biotechnology industry and the overall market on the basis of return on equity, DUSA PHARMACEUTICALS INC has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
- DUSA 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 4.92, which clearly demonstrates the ability to cover short-term cash needs.
- The revenue growth greatly exceeded the industry average of 7.8%. Since the same quarter one year prior, revenues rose by 27.2%. This growth in revenue does not appear to have trickled down to the company's bottom line, displaying stagnant earnings per share.