Boston, MA 03/13/2014 (wallstreetpr) – Zogenix, Inc. (NASDAQ:ZGNX) stock could be subject of harsh treatment in the market especially after going down by 22.7% on Wednesday trading session after its fierce rival Purdue Pharma announced it had completed the testing of an abuse resistant pain killer, Hydrocodone. The announcement has come at a worse time for Zogenix, as it will undercut the sale of its recently released hydrocodone pain killer Zohydro
Zogenix could also face the wrath of Food and Drug Administration if Purdue Pharma pill is found to be safer and least subject to abuse compared to Zohydro. Zogenix has consequently replied to this concerns by saying it is working on its own version of abuse-proof Zohydro that would be ready for testing as of 2016.
TheStreet currently rate Zogenix as a “sell” with a score rating of D-, as the company is currently grappling with reduced net income as well as a disappointing return on equity and poor profit margins
Highlights Of The Sell Rating
Zogenix has underperformed in terms of change in net income when compared to that of the same quarter a year ago, something that should be of a worry to investors. The company’s change in net income currently lags that of the industry average as well as that of the S&P 500 index. The company’s net income has dropped by a high of 5439% when compared to the same quarter a year ago.
Zogenix return on equity is currently low compared to that of the same quarter the prior year as well as that of the industry average and the S&P 500 index. This is essentially a sign of weakness when compared to other players in the Pharmaceutical industry.
Zogenix gross profit margin is also not desirable coming in at 25.03% having substantially decreased when compared to that of the same quarter a year ago. The company’s net profit margin on the other hand comes in at -358.99% also lagging that of the industry average and the S&P 500 index.
The company’s debt to equity ratio currently stands at a high of 1.56 when compared to the industry average suggesting good debt management strategies need be employed. Zogenix also boosts of a strong quick ratio of 1.34 demonstrating its ability to meet short term cash needs. The company on the other had is grappling with a decline in its earnings per share when compared to that of the same quarter a year ago.
