Stocks of BioAmber (NASDAQ:BIOA) Slumping Down

On Tuesday, the shares of BioAmber (NASDAQ:BIOA) fell down by 12 percent and reached the value of $12.50. This decline in BioAmber stocks resulted when the company offered 2.8 million shares to the public. The stocks belonged to the common category and the revenue generated through this sale will be used for ‘general corporate purposes’.

For this offering, Canaccord (CCORF) and Credit Suisse (CS) will act as book runners for the company

Analysts at TheStreet gave BioAmber (NASDAQ:BIOA) a score of D with a rating of ‘Sell’. The ratings team, when asked about the low score of BiaAmber, said that the company has certain weaknesses and those weaknesses had a greater impact on company’s ratings. The team further stated that the weaknesses of the company will make it difficult for the investors and traders to attain positive results. The company had its weaknesses in certain areas, for instance, its declining profit margins and net income. Moreover, the growth rate of BioAmber EPS is also not good.

Highlights of the analysis report:

The company’s net income has gone down, if compared with the figures of net income a year back. The decline in BioAmber’s net income has caused the company to underperform in Chemicals industry sector as well as Standards & Poor’s 500. The net income of the company has fallen down by 109.6 percent when the figures for this year are compared with last year’s numbers. BioAmber’s most recent quarter’s net income was recorded to be -$19.91 million whereas the income for the same quarter, a year back, was -$9.50 million.
BioAmber’s gross profit margin is running low; the figures have gone down considerably when compared with the numbers of last year. Currently the figures are at 20.23 percent. Similarly, the net profit margin is also below the industry average; it is recorded to be -5672.64 percent.
The EPS of the company has also fallen down when compared with the EPS of the same quarter, a year back. The EPS remained unstable throughout the quarter, and the estimates are that it will fall down further in the upcoming year.
However, the company’s return on equity increased this year. The figures were not so good last year. Such good ROE shows strength that lies within the company, especially when the BioAmber’s returns on equity are far better than that of industry average and Standard & Poor’s 500.
Moreover, the company’s cash flow, particularly the net operating cash flow, has increased considerably over this recent quarter. The figures have reached to -$4.87 million, an increase of 65.40 percent when compared with the same quarter a year ago. The company has also exceeded cash flow average of the industry with a rate of 0.29 percent.

Coming to the stocks of BioAmber (NASDAQ:BIOA), the company has a total of 18,412,815 outstanding shares. The company’s beta i\f 0.25 and its one year target price is $22. As far as the 52 week high and 52 week low of the company are concerned, the figures are reported to be around $15.29 and $3.96 respectively.