NEW YORK (TheStreet) -- Solazyme (SZYM) shares are jumping, up 8.32% to $10.55, on Thursday after announcing that it was producing the first commercially salable products on full-scale production lines at its Brazilian plant.
The company expects to reach nameplate capacity withing the next 12-18 months.
"With production underway at the Solazyme Bunge Renewable Oils plant, Solazyme is manufacturing products at three large scale facilities, including our 2,000 MT/year integrated facility in Peoria, the 20,000 MT/year Iowa facilities in Clinton/Galva and the 100,000 MT/year facility in Brazil," said CEO Jonathan Wolfson.
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TheStreet Ratings team rates SOLAZYME INC as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:
"We rate SOLAZYME INC (SZYM) a SELL. This is driven by several weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed against the S&P 500 and did not exceed that of the Oil, Gas & Consumable Fuels industry. The net income has significantly decreased by 30.7% when compared to the same quarter one year ago, falling from -$26.53 million to -$34.68 million.
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, SOLAZYME INC's return on equity significantly trails that of both the industry average and the S&P 500.
- Reflecting the weaknesses we have cited, including the decline in the company's earnings per share, SZYM has underperformed the S&P 500 Index, declining 11.94% 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.
- SOLAZYME INC's earnings per share declined by 16.3% in the most recent quarter compared to the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, SOLAZYME INC reported poor results of -$1.81 versus -$1.37 in the prior year. This year, the market expects an improvement in earnings (-$1.49 versus -$1.81).
- SZYM's debt-to-equity ratio of 0.74 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.
- You can view the full analysis from the report here: SZYM Ratings Report