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) -- Regulus Therapeutics (Nasdaq: RGLS) has been downgraded by TheStreet Ratings from hold to sell. The company's weaknesses can be seen in multiple areas, such as its weak operating cash flow and feeble growth in its earnings per share.
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- Net operating cash flow has significantly decreased to -$9.31 million or 1194.47% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- REGULUS THERAPEUTICS INC has improved earnings per share by 45.0% 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, REGULUS THERAPEUTICS INC reported poor results of -$0.58 versus -$0.37 in the prior year. For the next year, the market is expecting a contraction of 1.7% in earnings (-$0.59 versus -$0.58).
- Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. Turning our attention to the future direction of the stock, we do not believe this stock offers ample reward opportunity to compensate for the risks, despite the fact that it rose over the past year.
- Compared to other companies in the Biotechnology industry and the overall market, REGULUS THERAPEUTICS INC's return on equity significantly trails that of both the industry average and the S&P 500.
- RGLS's debt-to-equity ratio is very low at 0.12 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 11.00, which clearly demonstrates the ability to cover short-term cash needs.