NEW YORK ( TheStreet) -- Cubist Pharmaceuticals (Nasdaq: CBST) 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, increase in net income, solid stock price performance, growth in earnings per share and expanding profit margins. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity. Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 2.6%. Since the same quarter one year prior, revenues rose by 30.2%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Biotechnology industry. The net income increased by 45.2% when compared to the same quarter one year prior, rising from $22.59 million to $32.79 million.
- Powered by its strong earnings growth of 32.35% and other important driving factors, this stock has surged by 28.72% over the past year, outperforming the rise in the S&P 500 Index during the same period. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
- CUBIST PHARMACEUTICALS INC has improved earnings per share by 32.4% 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, CUBIST PHARMACEUTICALS INC reported lower earnings of $0.44 versus $1.53 in the prior year. This year, the market expects an improvement in earnings ($1.71 versus $0.44).
- The gross profit margin for CUBIST PHARMACEUTICALS INC is currently very high, coming in at 74.50%. Regardless of CBST's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 15.50% trails the industry average.
-- Written by a member of TheStreet RatingsStaff