NEW YORK ( TheStreet) -- Sinovac Biotech (Nasdaq: SVA) has been downgraded by TheStreet Ratings from hold to sell. The company's weaknesses can be seen in multiple areas, such as its unimpressive growth in net income, weak operating cash flow, generally disappointing historical performance in the stock itself 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 100.8% when compared to the same quarter one year ago, falling from -$2.80 million to -$5.61 million.
- Net operating cash flow has significantly decreased to -$11.87 million or 54.33% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 53.65%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 100.00% compared to the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
- SINOVAC BIOTECH LTD 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. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, SINOVAC BIOTECH LTD continued to lose money by earning -$0.02 versus -$0.17 in the prior year. For the next year, the market is expecting a contraction of 725.0% in earnings (-$0.17 versus -$0.02).
- The gross profit margin for SINOVAC BIOTECH LTD is currently very high, coming in at 78.10%. Regardless of SVA's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, SVA's net profit margin of -94.00% significantly underperformed when compared to the industry average.
-- Written by a member of TheStreet Ratings Staff