NEW YORK ( TheStreet) -- POZEN (Nasdaq: POZN) 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, notable return on equity and reasonable valuation levels. 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:
- POZN's very impressive revenue growth greatly exceeded the industry average of 4.3%. Since the same quarter one year prior, revenues leaped by 151.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Pharmaceuticals industry and the overall market, POZEN INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
- The gross profit margin for POZEN INC is currently very high, coming in at 84.20%. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, POZN's net profit margin of 84.20% significantly outperformed against the industry.
- POZEN INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, POZEN INC increased its bottom line by earning $1.40 versus $0.75 in the prior year. For the next year, the market is expecting a contraction of 165.7% in earnings (-$0.92 versus $1.40).
- POZN has underperformed the S&P 500 Index, declining 11.87% 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