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) -- Isis Pharmaceuticals (Nasdaq: ISIS) 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 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 1770.8% when compared to the same quarter one year ago, falling from -$1.67 million to -$31.28 million.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Biotechnology industry and the overall market, ISIS PHARMACEUTICALS INC's return on equity significantly trails that of both the industry average and the S&P 500.
- ISIS 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. 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, ISIS PHARMACEUTICALS INC continued to lose money by earning -$0.53 versus -$0.65 in the prior year. For the next year, the market is expecting a contraction of 32.1% in earnings (-$0.70 versus -$0.53).
- The revenue fell significantly faster than the industry average of 28.6%. Since the same quarter one year prior, revenues fell by 35.0%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- 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.