Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link. NEW YORK ( TheStreet) -- Osiris Therapeutics (Nasdaq: OSIR) has been downgraded by TheStreet Ratings from hold to sell. The company's weaknesses can be seen in multiple areas, such as its disappointing return on equity and feeble growth in its earnings per share.
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- 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 Biotechnology industry and the overall market, OSIRIS THERAPEUTICS INC's return on equity significantly trails that of both the industry average and the S&P 500.
- OSIRIS THERAPEUTICS INC has improved earnings per share by 15.4% 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, OSIRIS THERAPEUTICS INC swung to a loss, reporting -$0.34 versus $0.44 in the prior year. For the next year, the market is expecting a contraction of 11.8% in earnings (-$0.38 versus -$0.34).
- The company, on the basis of net income growth from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and the Biotechnology industry average. The net income increased by 11.9% when compared to the same quarter one year prior, going from -$4.27 million to -$3.76 million.
- Investors have driven up the company's shares by 32.08% over the past year, a rise that has exceeded that of the S&P 500 Index. Despite the fact that the stock's value has already enjoyed nice gains in the past year, we feel that the risks surrounding an investment in this stock outweigh any potential future returns.
- OSIR's debt-to-equity ratio is very low at 0.01 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 4.89, which clearly demonstrates the ability to cover short-term cash needs.