NEW YORK ( TheStreet) -- Alexza Pharmaceuticals (Nasdaq: ALXA) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its notable return on equity, good cash flow from operations and solid stock price performance. However, as a counter to these strengths, we find that the company has not been very careful in the management of its balance sheet. Highlights from the ratings report include:
- Compared to other companies in the Pharmaceuticals industry and the overall market, ALEXZA PHARMACTCLS INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
- Net operating cash flow has slightly increased to -$7.59 million or 8.63% when compared to the same quarter last year. In addition, ALEXZA PHARMACTCLS INC has also vastly surpassed the industry average cash flow growth rate of -44.66%.
- ALEXZA PHARMACTCLS INC has improved earnings per share by 45.8% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, ALEXZA PHARMACTCLS INC continued to lose money by earning -$0.09 versus -$2.68 in the prior year. For the next year, the market is expecting a contraction of 488.9% in earnings (-$0.53 versus -$0.09).
- The debt-to-equity ratio of 1.27 is relatively high when compared with the industry average, suggesting a need for better debt level management. Even though the debt-to-equity ratio is weak, ALXA's quick ratio is somewhat strong at 1.24, demonstrating the ability to handle short-term liquidity needs.