TheStreet Ratings team rates Renren Inc -ADR as a Sell with a ratings score of D. The team has this to say about their recommendation:
"We rate Renren Inc -ADR (RENN) a SELL. This is driven by several weaknesses, 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 feeble growth in its earnings per share, deteriorating net income, disappointing return on equity and generally disappointing historical performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Renren Inc -ADR has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. Earnings per share have declined over the last year. We anticipate that this should continue in the coming year. During the past fiscal year, Renren Inc -ADR swung to a loss, reporting -19 cents a share vs. 11 cents a share in the prior year. For the next year, the market is expecting a contraction of 21.1% in earnings (-23 cents vs. -19 cents).
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Internet Software & Services industry. The net income has significantly decreased by 60.0% when compared to the same quarter one year ago, falling from -$15.40 million to -$24.63 million.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Internet Software & Services industry and the overall market, Renren Inc -ADR's return on equity significantly trails that of both the industry average and the S&P 500.
- The share price of Renren Inc -ADR has not done very well: it is down 7.53% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. 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.
- RENN, with its decline in revenue, underperformed when compared the industry average of 9.1%. Since the same quarter one year prior, revenues slightly dropped by 5.6%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
- You can view the full analysis from the report here: RENN Ratings Report