NEW YORK ( TheStreet) -- Theravance (Nasdaq: THRX) has been upgraded by TheStreet Ratings from sell 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, robust revenue growth and solid stock price performance. However, as a counter to these strengths, we also find weaknesses including deteriorating net income and feeble growth in the company's earnings per share. Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 2.6%. Since the same quarter one year prior, revenues rose by 21.3%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- After a year of stock price fluctuations, the net result is that THRX's price has not changed very much. Although its weak earnings growth may have played a role in this flat result, don't lose sight of the fact that the performance of the overall market, as measured by the S&P 500 Index, was essentially similar. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
- THERAVANCE INC's earnings per share declined by 27.6% 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, THERAVANCE INC continued to lose money by earning -$1.17 versus -$1.36 in the prior year. For the next year, the market is expecting a contraction of 14.5% in earnings (-$1.34 versus -$1.17).
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed against the S&P 500 and did not exceed that of the Biotechnology industry. The net income has significantly decreased by 44.3% when compared to the same quarter one year ago, falling from -$21.22 million to -$30.63 million.