Hyperion Therapeutics (HPTX) Downgraded From Buy to Hold

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NEW YORK (TheStreet) -- Hyperion Therapeutics  (HPTX) has been downgraded by TheStreet Ratings from Buy to Hold with a ratings score of C.  TheStreet Ratings Team has this to say about their recommendation:

"We rate HYPERION THERAPEUTICS INC (HPTX) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures and reasonable valuation levels. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income and feeble growth in the company's earnings per share."

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Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • HPTX's very impressive revenue growth greatly exceeded the industry average of 40.9%. Since the same quarter one year prior, revenues leaped by 407.8%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • HPTX's debt-to-equity ratio is very low at 0.04 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 3.29, which clearly demonstrates the ability to cover short-term cash needs.
  • Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period, despite the company's weak earnings results. 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.
  • HYPERION THERAPEUTICS INC's earnings per share declined by 30.8% 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, HYPERION THERAPEUTICS INC turned its bottom line around by earning $0.68 versus -$2.00 in the prior year. For the next year, the market is expecting a contraction of 26.5% in earnings ($0.50 versus $0.68).
  • 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 30.1% when compared to the same quarter one year ago, falling from $25.02 million to $17.48 million.
  • You can view the full analysis from the report here: HPTX Ratings Report

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