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) -- Pacira Pharmaceuticals (Nasdaq: PCRX) 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, poor profit margins and generally high debt management risk.
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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 Pharmaceuticals industry. The net income has significantly decreased by 94.5% when compared to the same quarter one year ago, falling from -$11.89 million to -$23.14 million.
- The gross profit margin for PACIRA PHARMACEUTICALS INC is currently extremely low, coming in at 1.70%. It has decreased significantly from the same period last year. Along with this, the net profit margin of -199.68% is significantly below that of the industry average.
- The debt-to-equity ratio of 1.40 is relatively high when compared with the industry average, suggesting a need for better debt level management. Despite the company's weak debt-to-equity ratio, the company has managed to keep a very strong quick ratio of 9.10, which shows the ability to cover short-term cash needs.
- 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 Pharmaceuticals industry and the overall market, PACIRA PHARMACEUTICALS INC's return on equity significantly trails that of both the industry average and the S&P 500.
- PACIRA 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. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, PACIRA PHARMACEUTICALS INC continued to lose money by earning -$1.73 versus -$2.35 in the prior year. This year, the market expects an improvement in earnings (-$1.53 versus -$1.73).
-- Written by a member of TheStreet Ratings Staff