NEW YORK ( TheStreet) -- Cornerstone Therapeutics (Nasdaq: CRTX) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, deteriorating net income and disappointing return on equity.

Highlights from the ratings report include:
  • CRTX's debt-to-equity ratio is very low at 0.01 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, CRTX has a quick ratio of 1.77, which demonstrates the ability of the company to cover short-term liquidity needs.
  • The gross profit margin for CORNERSTONE THERAPEUTICS INC is rather high; currently it is at 60.40%. Regardless of CRTX's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, CRTX's net profit margin of 0.50% is significantly lower than the same period one year prior.
  • Net operating cash flow has significantly decreased to -$11.11 million or 413.43% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Pharmaceuticals industry and the overall market, CORNERSTONE THERAPEUTICS INC's return on equity significantly trails that of both the industry average and the S&P 500.

Cornerstone Therapeutics Inc., a specialty pharmaceutical company, engages in the acquisition, development, and commercialization of branded and generic pharmaceuticals primarily for the respiratory and related markets in the United States. The company has a P/E ratio of 51.9, equal to the average drugs industry P/E ratio and above the S&P 500 P/E ratio of 17.7. Cornerstone has a market cap of $148.6 million and is part of the health care sector and drugs industry. Shares are down 9.5% year to date as of the close of trading on Thursday.

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