NEW YORK ( TheStreet) -- Biostar Pharmaceuticals (Nasdaq: BSPM) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures and notable return on equity. However, as a counter to these strengths, we also find weaknesses including weak operating cash flow and a generally disappointing performance in the stock itself. Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 6.6%. Since the same quarter one year prior, revenues rose by 22.8%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- BSPM'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. Along with this, the company maintains a quick ratio of 5.01, which clearly demonstrates the ability to cover short-term cash needs.
- The gross profit margin for BIOSTAR PHARMACEUTICALS INC is currently very high, coming in at 70.50%. Regardless of BSPM's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 18.00% trails the industry average.
- BSPM's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 81.32%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
- Net operating cash flow has declined marginally to $6.92 million or 2.35% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, BIOSTAR PHARMACEUTICALS INC has marginally lower results.