Why GenVec (GNVC) Stock Is Up In Aftermarket Trading

NEW YORK (TheStreet) -- Shares of GenVec Inc. (GNVC) were up 12.83% to $2.99 in aftermarket trading Thursday. The jump comes ahead of the company posting its fiscal 2013 fourth quarter earnings on Friday.

Consensus EPS forecast for the company is - 10 cents, a 58.33% increase from fourth quarter of 2012. GenVec is a bio pharmaceutical company that specializes in developing gene based therapeutic drugs and vaccines.

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TheStreet Ratings team rates GENVEC INC as a Sell with a ratings score of E+. TheStreet Ratings Team has this to say about their recommendation:

"We rate GENVEC INC (GNVC) a SELL. This is based on several weak investment measures, which should drive this stock to significantly underperform the majority of stocks that we rate. Among the areas we feel are negative, one of the most important has been an overall disappointing return on equity."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • 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, GENVEC 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 14.6%. Since the same quarter one year prior, revenues fell by 25.6%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • GENVEC INC has improved earnings per share by 25.8% in the most recent quarter compared to 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, GENVEC INC reported poor results of -$1.08 versus -$0.60 in the prior year. This year, the market expects an improvement in earnings (-$0.87 versus -$1.08).
  • Net operating cash flow has increased to -$2.23 million or 18.61% when compared to the same quarter last year. Despite an increase in cash flow, GENVEC INC's cash flow growth rate is still lower than the industry average growth rate of 63.23%.
  • This stock has increased by 77.77% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the future course of this stock, we feel that the risks involved in investing in GNVC do not compensate for any future upside potential, despite the fact that it has seen nice gains over the past 12 months.
  • You can view the full analysis from the report here: GNVC Ratings Report
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