NEW YORK ( TheStreet) -- Theravance (Nasdaq: THRX) 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, compelling growth in net income and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including generally poor debt management and a generally disappointing performance in the stock itself. Highlights from the ratings report include:
- THRX's very impressive revenue growth greatly exceeded the industry average of 8.0%. Since the same quarter one year prior, revenues leaped by 1907.6%. 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 473.2% when compared to the same quarter one year prior, rising from -$22.67 million to $84.59 million.
- Compared to other companies in the Biotechnology industry and the overall market, THERAVANCE INC's return on equity significantly trails that of both the industry average and the S&P 500.
- THRX has underperformed the S&P 500 Index, declining 23.19% 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.
- The debt-to-equity ratio is very high at 28.14 and currently higher than the industry average, implying that there is very poor management of debt levels within the company.
-- Written by a member of TheStreet RatingsStaff