Medivation Inc. Stock Downgraded (MDVN)

NEW YORK ( TheStreet) -- Medivation (Nasdaq: MDVN) has been downgraded by TheStreet Ratings from hold to sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, weak operating cash flow and feeble growth in its earnings per share.

Highlights from the ratings report include:
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Biotechnology industry. The net income has significantly decreased by 179.5% when compared to the same quarter one year ago, falling from -$3.89 million to -$10.87 million.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Biotechnology industry and the overall market, MEDIVATION INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has significantly decreased to -$25.74 million or 626.53% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • MEDIVATION INC has exprienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has reported a trend of declining earnings per share over the past year. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, MEDIVATION INC reported poor results of -$1.11 versus -$0.99 in the prior year. This year, the market expects an improvement in earnings (-$0.47 versus -$1.11).
  • MDVN, with its decline in revenue, underperformed when compared the industry average of 3.0%. Since the same quarter one year prior, revenues fell by 10.2%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
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Medivation, Inc., a biopharmaceutical company, focuses on the development of small molecule drugs for the treatment of castration-resistant prostate cancer, Alzheimer's disease, and Huntington disease. Medivation has a market cap of $1.83 billion and is part of the health care sector and drugs industry. Shares are up 39.2% year to date as of the close of trading on Thursday.

You can view the full Medivation Ratings Report or get investment ideas from our investment research center.
-- Written by a member of TheStreet Ratings Staff
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