ChinaNet Online Holdings Inc. Stock Downgraded (CNET)
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Media industry. The net income increased by 498.1% when compared to the same quarter one year prior, rising from $0.79 million to $4.71 million.
- CHINANET ONLINE HOLDINGS 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, CHINANET ONLINE HOLDINGS turned its bottom line around by earning $0.79 versus -$0.21 in the prior year. This year, the market expects an improvement in earnings ($0.84 versus $0.79).
- CNET's debt-to-equity ratio is very low at 0.00 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 4.54, which clearly demonstrates the ability to cover short-term cash needs.
- CNET, with its decline in revenue, underperformed when compared the industry average of 11.7%. Since the same quarter one year prior, revenues slightly dropped by 0.1%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- CNET has underperformed the S&P 500 Index, declining 24.79% 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.
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