NEW YORK ( TheStreet) -- Immunomedics (Nasdaq: IMMU) has been downgraded by TheStreet Ratings from hold to sell. The company's weaknesses can be seen in multiple areas, such as its disappointing return on equity, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share. Highlights from the ratings report include:
- 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, IMMUNOMEDICS INC's return on equity significantly trails that of both the industry average and the S&P 500.
- IMMU has underperformed the S&P 500 Index, declining 7.85% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
- IMMUNOMEDICS INC has improved earnings per share by 22.2% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, IMMUNOMEDICS INC swung to a loss, reporting -$0.21 versus $0.49 in the prior year. For the next year, the market is expecting a contraction of 57.1% in earnings (-$0.33 versus -$0.21).
- IMMU, with its decline in revenue, underperformed when compared the industry average of 2.6%. Since the same quarter one year prior, revenues fell by 23.4%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- IMMU 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 4.75, which clearly demonstrates the ability to cover short-term cash needs.