NEW YORK ( TheStreet) -- Neurocrine Biosciences (Nasdaq: NBIX) has been upgraded by TheStreet Ratings from hold to buy. 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, notable return on equity, expanding profit margins and solid stock price performance. We feel these strengths outweigh the fact that the company shows weak operating cash flow. Highlights from the ratings report include:
- NBIX's very impressive revenue growth greatly exceeded the industry average of 2.8%. Since the same quarter one year prior, revenues leaped by 188.2%. Growth in the company's revenue appears to have helped boost the earnings per share.
- NBIX 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 2.77, which clearly demonstrates the ability to cover short-term cash needs.
- 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, NEUROCRINE BIOSCIENCES INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
- The gross profit margin for NEUROCRINE BIOSCIENCES INC is currently very high, coming in at 75.60%. It has increased significantly from the same period last year. Along with this, the net profit margin of 75.40% significantly outperformed against the industry average.
- Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period. Although other factors naturally played a role, the company's strong earnings growth was key. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
-- Written by a member of TheStreet RatingsStaff