NEW YORK (TheStreet) -- Optimer Pharmaceuticals (Nasdaq:OPTR) has been downgraded by TheStreet Ratings from hold to sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, weak operating cash flow 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 Pharmaceuticals industry. The net income has significantly decreased by 124.2% when compared to the same quarter one year ago, falling from $45.13 million to -$10.92 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 Pharmaceuticals industry and the overall market, OPTIMER PHARMACEUTICALS INC's return on equity significantly trails that of both the industry average and the S&P 500.
- Net operating cash flow has significantly decreased to -$27.75 million or 154.74% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- OPTIMER PHARMACEUTICALS 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. 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, OPTIMER PHARMACEUTICALS INC turned its bottom line around by earning $0.23 versus -$1.27 in the prior year. For the next year, the market is expecting a contraction of 669.6% in earnings (-$1.31 versus $0.23).
- OPTR, with its very weak revenue results, has greatly underperformed against the industry average of 5.2%. Since the same quarter one year prior, revenues plummeted by 79.2%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
-- Written by a member of TheStreet Ratings Staff