NEW YORK ( TheStreet) -- Immunomedics (Nasdaq: IMMU) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its increase in net income, largely solid financial position with reasonable debt levels by most measures and notable return on equity. 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:
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Biotechnology industry average. The net income increased by 2.5% when compared to the same quarter one year prior, going from -$7.46 million to -$7.27 million.
- IMMU 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 7.32, which clearly demonstrates the ability to cover short-term cash needs.
- IMMU, with its decline in revenue, underperformed when compared the industry average of 5.2%. Since the same quarter one year prior, revenues fell by 11.5%. Weakness in the company's revenue seems to not be hurting the bottom line, shown by stable earnings per share.
- IMMUNOMEDICS INC reported flat earnings per share in the most recent quarter. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, IMMUNOMEDICS INC swung to a loss, reporting -$0.21 versus $0.49 in the prior year. This year, the market expects an improvement in earnings ($0.02 versus -$0.21).
- IMMU has underperformed the S&P 500 Index, declining 7.68% 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 Ratings Staff