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) -- ACADIA Pharmaceuticals (Nasdaq: ACAD) 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 and feeble growth in its earnings per share.
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- 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 28.5% when compared to the same quarter one year ago, falling from -$5.30 million to -$6.81 million.
- Net operating cash flow has decreased to -$6.30 million or 17.96% when compared to the same quarter last year. Despite a decrease in cash flow ACADIA PHARMACEUTICALS INC is still fairing well by exceeding its industry average cash flow growth rate of -33.84%.
- ACADIA PHARMACEUTICALS INC's earnings per share declined by 10.0% in the most recent quarter compared to 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, ACADIA PHARMACEUTICALS INC continued to lose money by earning -$0.37 versus -$0.44 in the prior year. For the next year, the market is expecting a contraction of 2.7% in earnings (-$0.38 versus -$0.37).
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Biotechnology industry and the overall market, ACADIA PHARMACEUTICALS INC's return on equity significantly trails that of both the industry average and the S&P 500.
- The revenue fell significantly faster than the industry average of 6.8%. Since the same quarter one year prior, revenues fell by 35.4%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
-- Written by a member of TheStreet Ratings Staff