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NEW YORK (TheStreet) -- Jazz Pharmaceuticals (JAZZ) 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 JAZZ PHARMACEUTICALS PLC (JAZZ) 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, expanding profit margins and solid stock price performance. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and premium valuation."
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Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth greatly exceeded the industry average of 9.8%. Since the same quarter one year prior, revenues rose by 32.0%. 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.
- The gross profit margin for JAZZ PHARMACEUTICALS PLC is currently very high, coming in at 91.80%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, JAZZ's net profit margin of 8.40% significantly trails the industry average.
- Compared to its closing price of one year ago, JAZZ's share price has jumped by 85.96%, exceeding the performance of the broader market during that same time frame. Looking ahead, however, we cannot assume that the stock's past performance is going to drive future results. Quite to the contrary, its sharp appreciation over the last year is one of the factors that should prompt investors to seek better opportunities elsewhere.
- 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 Pharmaceuticals industry. The net income has significantly decreased by 65.8% when compared to the same quarter one year ago, falling from $75.41 million to $25.77 million.
- You can view the full analysis from the report here: JAZZ Ratings Report