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) -- Vertex Pharmaceuticals (Nasdaq: VRTX) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its increase in stock price during the past year, compelling growth in net income and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including weak operating cash flow and feeble growth in the company's earnings per share.
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- Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
- The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Biotechnology industry average. The net income increased by 24.5% when compared to the same quarter one year prior, going from -$308.02 million to -$232.46 million.
- Despite currently having a low debt-to-equity ratio of 0.44, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 3.71 is very high and demonstrates very strong liquidity.
- VERTEX PHARMACEUTICALS INC has improved earnings per share by 30.1% 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, VERTEX PHARMACEUTICALS INC reported poor results of -$2.04 versus -$0.50 in the prior year. For the next year, the market is expecting a contraction of 42.1% in earnings (-$2.90 versus -$2.04).
- Net operating cash flow has significantly decreased to -$175.76 million or 167.20% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.