NEW YORK (TheStreet) -- Rockwell Medical (RMTI) shares are down 4% to $10.15 in after hours trading on Monday after the hemodialysis concentrate solutions and dialysis kit manufacturer proposed a public offering of $55 million worth of its common stock.
Bank of America/Merrill Lynch will act as the sole book-runner for the deal though the company has not made any assurances as to when or whether the offering will be completed. The company is proposing to raise money ahead of the FDA's decision on its iron deficiency anemia in ESRD patients treatment Triferic, a decision that is expected in January.
The company met analysts' EPS estimates when it reported a third quarter loss of 10 cents per diluted share last week, in line with consensus expectations, on revenue of $13.7 million that was slightly ahead of the $13.5 million analysts were anticipating.
TheStreet Ratings team rates ROCKWELL MEDICAL INC as a Sell with a ratings score of D-. TheStreet Ratings Team has this to say about their recommendation:
"We rate ROCKWELL MEDICAL INC (RMTI) a SELL. This is driven by a number of negative factors, 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 poor profit margins and generally disappointing historical performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The gross profit margin for ROCKWELL MEDICAL INC is rather low; currently it is at 17.39%. Regardless of RMTI's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, RMTI's net profit margin of -24.32% significantly underperformed when compared to the industry average.
- RMTI has underperformed the S&P 500 Index, declining 19.76% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
- ROCKWELL MEDICAL INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, ROCKWELL MEDICAL INC continued to lose money by earning -$1.65 versus -$2.64 in the prior year. This year, the market expects an improvement in earnings (-$0.45 versus -$1.65).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Health Care Equipment & Supplies industry. The net income increased by 73.3% when compared to the same quarter one year prior, rising from -$11.86 million to -$3.17 million.
- Despite its growing revenue, the company underperformed as compared with the industry average of 6.3%. Since the same quarter one year prior, revenues slightly increased by 0.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
- You can view the full analysis from the report here: RMTI Ratings Report