Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model. NEW YORK ( TheStreet) -- Pernix Therapeutics Holdings (AMEX: PTX) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, feeble growth in the company's earnings per share and deteriorating net income.
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- PTX 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. To add to this, PTX has a quick ratio of 2.50, which demonstrates the ability of the company to cover short-term liquidity needs.
- The gross profit margin for PERNIX THERAPEUTICS HOLDINGS is rather high; currently it is at 67.50%. Regardless of PTX's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, PTX's net profit margin of -8.90% significantly underperformed when compared to the industry average.
- PERNIX THERAPEUTICS HOLDINGS 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. Earnings per share have declined over the last year. We anticipate that this should continue in the coming year. During the past fiscal year, PERNIX THERAPEUTICS HOLDINGS reported lower earnings of $0.34 versus $0.42 in the prior year. For the next year, the market is expecting a contraction of 32.4% in earnings ($0.23 versus $0.34).
- 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 162.1% when compared to the same quarter one year ago, falling from $1.50 million to -$0.93 million.
-- Written by a member of TheStreet Ratings Staff