NEW YORK ( TheStreet) -- Maxygen (Nasdaq: MAXY) has been downgraded by TheStreet Ratings from hold to sell. The company's weaknesses can be seen in multiple areas, such as its feeble growth in its earnings per share, deteriorating net income and disappointing return on equity. Highlights from the ratings report include:
- MAXYGEN 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 suffered a declining pattern earnings per share over the past two years. During the past fiscal year, MAXYGEN INC swung to a loss, reporting -$0.21 versus $2.32 in the prior year.
- 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 103.2% when compared to the same quarter one year ago, falling from $69.92 million to -$2.23 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 on the basis of return on equity, MAXYGEN INC has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
- MAXY, with its very weak revenue results, has greatly underperformed against the industry average of 3.0%. Since the same quarter one year prior, revenues plummeted by 99.4%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- MAXY 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 50.42, which clearly demonstrates the ability to cover short-term cash needs.
-- Written by a member of TheStreet Ratings Staff