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) -- NPS Pharmaceuticals (Nasdaq: NPSP) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance and growth in earnings per share. However, as a counter to these strengths, we also find weaknesses including weak operating cash flow, poor profit margins and generally higher debt management risk.
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- The revenue growth greatly exceeded the industry average of 10.6%. Since the same quarter one year prior, revenues rose by 45.1%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- Powered by its strong earnings growth of 75.00% and other important driving factors, this stock has surged by 299.44% over the past year, outperforming the rise in the S&P 500 Index during the same period. 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.
- Compared to other companies in the Biotechnology industry and the overall market, NPS PHARMACEUTICALS INC's return on equity significantly trails that of both the industry average and the S&P 500.
- The gross profit margin for NPS PHARMACEUTICALS INC is currently extremely low, coming in at 6.43%. Regardless of NPSP's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, NPSP's net profit margin of -2.77% significantly underperformed when compared to the industry average.
- Net operating cash flow has significantly decreased to -$6.92 million or 180.51% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.