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) -- Isis Pharmaceuticals (Nasdaq: ISIS) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its solid stock price performance and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and disappointing return on equity.
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- Compared to its closing price of one year ago, ISIS's share price has jumped by 72.73%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
- Even though the current debt-to-equity ratio is 1.33, it is still below the industry average, suggesting that this level of debt is acceptable within the Biotechnology industry. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 6.79 is very high and demonstrates very strong liquidity.
- The revenue fell significantly faster than the industry average of 2.6%. Since the same quarter one year prior, revenues fell by 44.0%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
- ISIS PHARMACEUTICALS INC's earnings per share declined by 37.0% in the most recent quarter compared to the same quarter a year ago. Earnings per share have declined over the last two years. We anticipate that this should continue in the coming year. During the past fiscal year, ISIS PHARMACEUTICALS INC reported poor results of -$0.85 versus -$0.62 in the prior year. For the next year, the market is expecting a contraction of 5.9% in earnings (-$0.90 versus -$0.85).
- 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 40.0% when compared to the same quarter one year ago, falling from -$26.88 million to -$37.64 million.
-- Written by a member of TheStreet Ratings Staff