Kimia Biosciences: From 'Sell' to 'Strong Sell' - Why?

Kimia Biosciences, a microcap pharmaceutical company, has recently been downgraded from 'Sell' to 'Strong Sell' by MarketsMOJO on 2023-12-05. This downgrade is due to several factors that suggest a weak long-term fundamental strength for the company.
One of the main concerns for Kimia Biosciences is its high debt levels, with a debt-to-equity ratio of 9.59 times. This indicates that the company may struggle to meet its financial obligations in the long run. Additionally, the company has a poor track record of growth, with operating profit growing at an annual rate of -251.46% over the last 5 years.

Kimia Biosciences also has a high debt to equity ratio (avg) of 4.80 times, which further adds to its financial risk. The company's return on capital employed (avg) is also low at 5.80%, suggesting low profitability per unit of total capital.

Furthermore, the company has reported negative results for the last 4 consecutive quarters, with interest and net sales showing a decline. This has led to a negative EBITDA and a decrease in profits by -451.4% in the last year.

In terms of stock performance, Kimia Biosciences has underperformed compared to the BSE 500 index in the last 3 years, 1 year, and 3 months. This, coupled with a negative return of -12.86% in the last year, makes the stock a risky investment.

On a technical level, the stock is currently in a mildly bullish range. However, the MACD and KST technical factors are also showing a bullish trend.

It is worth noting that the majority of shareholders in the company are promoters, which may have some influence on the company's decision-making processes.

In conclusion, due to its high debt levels, poor growth prospects, and negative financial performance, MarketsMOJO has downgraded the stock call on Kimia Biosciences to 'Strong Sell'. Investors should carefully consider these factors before making any investment decisions.