NEW YORK ( TheStreet) -- Insmed (Nasdaq: INSM) has been downgraded by TheStreet Ratings from hold to sell. The company's weaknesses can be seen in multiple areas, such as its feeble growth in its earnings per share, deteriorating net income, disappointing return on equity and weak operating cash flow. Highlights from the ratings report include:
- INSMED INC's earnings have gone downhill when comparing its most recently reported quarter with the same quarter a year earlier. Earnings per share have declined over the last year. We anticipate that this should continue in the coming year. During the past fiscal year, INSMED INC swung to a loss, reporting -$0.40 versus $9.60 in the prior year. For the next year, the market is expecting a contraction of 407.5% in earnings (-$2.03 versus -$0.40).
- 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 2550.3% when compared to the same quarter one year ago, falling from -$0.38 million to -$10.02 million.
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Biotechnology industry and the overall market, INSMED INC's return on equity significantly trails that of both the industry average and the S&P 500.
- Net operating cash flow has significantly decreased to -$11.02 million or 650.04% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- This stock's share value has moved by only 41.31% over the past year. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.