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) -- Sunesis Pharmaceuticals (Nasdaq: SNSS) 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, weak operating cash flow and generally disappointing historical performance in the stock itself.
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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 25.4% when compared to the same quarter one year ago, falling from -$11.62 million to -$14.57 million.
- Reflecting the weaknesses we have cited, including the decline in the company's earnings per share, SNSS has underperformed the S&P 500 Index, declining 12.12% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
- Net operating cash flow has decreased to -$11.40 million or 20.20% when compared to the same quarter last year. Despite a decrease in cash flow of 20.20%, SUNESIS PHARMACEUTICALS INC is in line with the industry average cash flow growth rate of -24.34%.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Biotechnology industry and the overall market, SUNESIS PHARMACEUTICALS INC's return on equity significantly trails that of both the industry average and the S&P 500.
- SNSS's debt-to-equity ratio of 0.62 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Despite the fact that SNSS's debt-to-equity ratio is mixed in its results, the company's quick ratio of 1.88 is high and demonstrates strong liquidity.