Why Inovio Pharmaceuticals (INO) Stock Is Declining Today

NEW YORK (TheStreet) -- Inovio Pharmaceuticals (INO) shares are down -9.1% to $9.05 on Monday after reporting a second quarter net loss from operations of 17 cents per diluted share that was wider than the 13 cent loss it experienced in the second quarter a year ago.

Net loss attributable to shareholders was 18 cents per diluted share, narrower than last year's loss of 24 cents per diluted share and ahead of analysts expectations by 1 cent.

While revenue for the quarter was $3.8 million, $2 million better than analysts expected, operating expenses more than doubled from year to year to $14 million from $6.5 million.

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TheStreet Ratings team rates INOVIO PHARMACEUTICALS INC as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:

"We rate INOVIO PHARMACEUTICALS INC (INO) a SELL. This is driven by multiple 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 and weak operating cash flow."

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 decreased by 22.4% when compared to the same quarter one year ago, dropping from -$8.84 million to -$10.82 million.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Biotechnology industry and the overall market, INOVIO PHARMACEUTICALS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has declined marginally to -$5.56 million or 8.32% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • INOVIO PHARMACEUTICALS INC has improved earnings per share by 16.7% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, INOVIO PHARMACEUTICALS INC reported poor results of -$1.40 versus -$0.56 in the prior year. This year, the market expects an improvement in earnings (-$0.65 versus -$1.40).
  • Investors have driven up the company's shares by 26.56% over the past year, a rise that has exceeded that of the S&P 500 Index. Regarding the future course of this stock, we feel that the risks involved in investing in INO do not compensate for any future upside potential, despite the fact that it has seen nice gains over the past 12 months.
  • You can view the full analysis from the report here: INO Ratings Report
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