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) -- Spectrum Pharmaceuticals (Nasdaq: SPPI) 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, disappointing return on equity, 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 625.7% when compared to the same quarter one year ago, falling from $7.49 million to -$39.37 million.
- 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, SPECTRUM PHARMACEUTICALS INC's return on equity significantly trails that of both the industry average and the S&P 500.
- Net operating cash flow has declined marginally to $7.92 million or 2.18% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- SPECTRUM PHARMACEUTICALS INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, SPECTRUM PHARMACEUTICALS INC swung to a loss, reporting -$1.01 versus $1.46 in the prior year. This year, the market expects an improvement in earnings (-$0.57 versus -$1.01).
- The revenue fell significantly faster than the industry average of 14.7%. Since the same quarter one year prior, revenues fell by 40.8%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.