Receptos Inc Stock Upgraded (RCPT)

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) -- Receptos (Nasdaq: RCPT) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its solid stock price performance, largely solid financial position with reasonable debt levels by most measures and notable return on equity. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share and deteriorating net income.

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Highlights from the ratings report include:
  • Compared to its closing price of one year ago, RCPT's share price has jumped by 163.12%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
  • RCPT's debt-to-equity ratio is very low at 0.05 and is currently below that of the industry average, implying that there has been very successful management of debt levels.
  • Compared to other companies in the Biotechnology industry and the overall market, RECEPTOS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • RECEPTOS INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. For the next year, the market is expecting a contraction of 37.6% in earnings (-$3.76 versus -$2.73).
  • 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 133.4% when compared to the same quarter one year ago, falling from -$9.92 million to -$23.15 million.

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