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) -- Anacor Pharmaceuticals (Nasdaq: ANAC) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its notable return on equity, robust revenue growth and solid stock price performance. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income and feeble growth in the company's earnings per share.
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- Compared to other companies in the Biotechnology industry and the overall market, ANACOR PHARMACEUTICALS INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
- ANAC's very impressive revenue growth greatly exceeded the industry average of 26.1%. Since the same quarter one year prior, revenues leaped by 143.4%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- ANACOR PHARMACEUTICALS INC's earnings per share declined by 21.4% 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, ANACOR PHARMACEUTICALS INC turned its bottom line around by earning $1.82 versus -$1.77 in the prior year. For the next year, the market is expecting a contraction of 203.0% in earnings (-$1.88 versus $1.82).
- 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 40.4% when compared to the same quarter one year ago, falling from -$15.08 million to -$21.17 million.