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) -- Cardiome Pharma Corporation (Nasdaq: CRME) has been downgraded by TheStreet Ratings from hold to sell. The company's weaknesses can be seen in multiple areas, such as its unimpressive growth in net income and weak operating cash flow.
- EXCLUSIVE OFFER: Jim Cramer's Protégé, Dave Peltier, only buys Stocks Under $10 that he thinks could potentially double. See what he's trading today with a 14-day FREE pass.
- 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 Pharmaceuticals industry. The net income has significantly decreased by 193.4% when compared to the same quarter one year ago, falling from $7.74 million to -$7.23 million.
- Net operating cash flow has declined marginally to -$5.80 million or 9.43% when compared to the same quarter last year. Despite a decrease in cash flow of 9.43%, CARDIOME PHARMA CORP is in line with the industry average cash flow growth rate of -16.32%.
- CARDIOME PHARMA CORP 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. This company has not demonstrated a clear trend in earnings over the past two years, making it difficult to accurately predict earnings for the coming year. During the past fiscal year, CARDIOME PHARMA CORP turned its bottom line around by earning $0.41 versus -$1.45 in the prior year.
- Compared to its closing price of one year ago, CRME's share price has jumped by 293.15%, exceeding the performance of the broader market during that same time frame. Regarding the future course of this stock, we feel that the risks involved in investing in CRME do not compensate for any future upside potential, despite the fact that it has seen nice gains over the past 12 months.
- CRME has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.13, which illustrates the ability to avoid short-term cash problems.