NEW YORK ( TheStreet) -- Siga Technologies (Nasdaq: SIGA) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, largely solid financial position with reasonable debt levels by most measures and notable return on equity. However, as a counter to these strengths, we also find weaknesses including weak operating cash flow and a generally disappointing performance in the stock itself. Highlights from the ratings report include:
- Net operating cash flow has significantly decreased to -$4.45 million or 187.22% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- SIGA's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 25.80%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
- SIGA TECHNOLOGIES INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. Stable earnings per share over the past year indicate the company has sound management over its earnings and share float. However, the consensus estimates suggest that there will be an upward trend in the coming year. During the past fiscal year, SIGA TECHNOLOGIES INC reported poor results of -$0.62 versus -$0.61 in the prior year. This year, the market expects an improvement in earnings ($0.38 versus -$0.62).
- SIGA 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 5.18, which clearly demonstrates the ability to cover short-term cash needs.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Biotechnology industry. The net income increased by 554.0% when compared to the same quarter one year prior, rising from -$5.25 million to $23.84 million.