NEW YORK ( TheStreet) -- Trius Therapeutics (Nasdaq: TSRX) has been downgraded by TheStreet Ratings from hold to sell. The area that we feel has been the company's primary weakness has been its disappointing return on equity. Highlights from the ratings report include:
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Biotechnology industry and the overall market, TRIUS THERAPEUTICS INC's return on equity significantly trails that of both the industry average and the S&P 500.
- TRIUS THERAPEUTICS INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, TRIUS THERAPEUTICS INC reported poor results of -$1.01 versus -$0.31 in the prior year. This year, the market expects an improvement in earnings (-$0.80 versus -$1.01).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Biotechnology industry. The net income increased by 268.4% when compared to the same quarter one year prior, rising from -$8.50 million to $14.31 million.
- This stock has increased by 27.88% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the future course of this stock, we feel that the risks involved in investing in TSRX do not compensate for any future upside potential, despite the fact that it has seen nice gains over the past 12 months.
- TSRX 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.