NEW YORK (TheStreet) -- NQ Mobile (NQ - Get Report) shares are falling 1.8% to $15.70 in aftermarket trading on Thursday, compounding the losses it endured during day trading.
The fall comes ahead of the mobile Internet service provider's aftermarket release of its Q4 earnings report. Analysts consensus EPS estimate for the stock is 32 cents per share.
The earnings call is set for 8 pm ET.
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TheStreet Ratings team rates NQ MOBILE INC -ADR as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate NQ MOBILE INC -ADR (NQ) a HOLD. The primary factors that have impacted our rating are mixed ? some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures and solid stock price performance. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and feeble growth in the company's earnings per share."
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Highlights from the analysis by TheStreet Ratings Team goes as follows:
- NQ's very impressive revenue growth greatly exceeded the industry average of 11.4%. Since the same quarter one year prior, revenues leaped by 110.1%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- NQ has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 4.14, which clearly demonstrates the ability to cover short-term cash needs.
- Compared to its closing price of one year ago, NQ's share price has jumped by 108.39%, exceeding the performance of the broader market during that same time frame. Setting our sights on the months ahead, however, we feel that the stock's sharp appreciation over the last year has driven it to a price level which is now relatively expensive compared to the rest of its industry. The implication is that its reduced upside potential is not good enough to warrant further investment at this time.
- 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 Software industry. The net income has significantly decreased by 881.6% when compared to the same quarter one year ago, falling from $0.35 million to -$2.72 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 Software industry and the overall market, NQ MOBILE INC -ADR's return on equity significantly trails that of both the industry average and the S&P 500.
- You can view the full analysis from the report here: NQ Ratings Report