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NEW YORK (TheStreet) -- Intercept Pharmaceuticals (ICPT) has been downgraded by TheStreet Ratings from Hold to Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:
"We rate INTERCEPT PHARMA INC (ICPT) 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, weak operating cash flow and feeble growth in its earnings per share."
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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 underperformed when compared to that of the S&P 500 and greatly underperformed compared to the Biotechnology industry average. The net income has decreased by 12.9% when compared to the same quarter one year ago, dropping from -$31.74 million to -$35.84 million.
- Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Biotechnology industry and the overall market, INTERCEPT PHARMA INC's return on equity significantly trails that of both the industry average and the S&P 500.
- Net operating cash flow has significantly decreased to -$23.87 million or 270.77% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- INTERCEPT PHARMA INC' earnings per share from the most recent quarter came in slightly below the year earlier quarter. Earnings per share have declined over the last year. We anticipate that this should continue in the coming year. During the past fiscal year, INTERCEPT PHARMA INC reported poor results of -$3.70 versus -$2.28 in the prior year. For the next year, the market is expecting a contraction of 258.9% in earnings (-$13.28 versus -$3.70).
- Compared to its closing price of one year ago, ICPT's share price has jumped by 260.09%, exceeding the performance of the broader market during that same time frame. Regarding the future course of this stock, we feel that the risks involved in investing in ICPT 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: ICPT Ratings Report