NEW YORK ( TheStreet) -- Trius Therapeutics (Nasdaq: TSRX) 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 compelling growth in net income. However, as a counter to these strengths, we find that the stock has had a generally disappointing performance in the past year. Highlights from the ratings report include:
- TSRX's very impressive revenue growth greatly exceeded the industry average of 3.8%. Since the same quarter one year prior, revenues leaped by 1468.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
- 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.
- 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 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.
- TSRX has underperformed the S&P 500 Index, declining 16.02% 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.
-- Written by a member of TheStreet RatingsStaff