Why Halozyme Therapeutics Was Upgraded To 'Buy' This Morning

NEW YORK (TheStreet) -- Halozyme Therapeutics Inc.  (HALO) was upgraded to "buy" from "neutral" at UBS (UBS) this morning with an increased price target of $16 from $14. 

Said UBS: "We like the positioning from here. Upgrading...on pipeline potential and risk/reward."

The stock is up 4.15% to $9.78 in pre-market trading.

Must Read: Warren Buffett's 25 Favorite Growth Stocks

 

Separately, TheStreet Ratings team rates HALOZYME THERAPEUTICS INC as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:

"We rate HALOZYME THERAPEUTICS INC (HALO) a SELL. This is driven by a few notable 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, weak operating cash flow 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 when compared to that of the S&P 500 and the Biotechnology industry. The net income has significantly decreased by 37.6% when compared to the same quarter one year ago, falling from -$19.29 million to -$26.55 million.
  • Net operating cash flow has significantly decreased to -$17.63 million or 63.98% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • HALOZYME THERAPEUTICS INC's earnings per share declined by 29.4% 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, HALOZYME THERAPEUTICS INC reported poor results of -$0.73 versus -$0.49 in the prior year. This year, the market expects an improvement in earnings (-$0.54 versus -$0.73).
  • 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, HALOZYME THERAPEUTICS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • HALO's debt-to-equity ratio of 0.75 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. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 4.83 is very high and demonstrates very strong liquidity.
  • You can view the full analysis from the report here: HALO Ratings Report

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