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Trade-Ideas LLC identified

Autohome

(

ATHM

) as a "perilous reversal" (up big yesterday but down big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Autohome as such a stock due to the following factors:

  • ATHM has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $12.8 million.
  • ATHM has traded 376,128 shares today.
  • ATHM is down 3.3% today.
  • ATHM was up 8.6% yesterday.

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More details on ATHM:

Autohome Inc. operates as an online destination for automobile consumers in the People's Republic of China. ATHM has a PE ratio of 17. Currently there are 2 analysts that rate Autohome a buy, 1 analyst rates it a sell, and none rate it a hold.

The average volume for Autohome has been 851,100 shares per day over the past 30 days. Autohome has a market cap of $2.8 billion and is part of the technology sector and internet industry. Shares are down 22.6% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Autohome as a

hold

. 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 reasonable valuation levels. However, as a counter to these strengths, we find that the stock has had a generally disappointing performance in the past year.

Highlights from the ratings report include:

  • ATHM's revenue growth has slightly outpaced the industry average of 20.3%. Since the same quarter one year prior, revenues rose by 30.2%. This growth in revenue does not appear to have trickled down to the company's bottom line, displaying stagnant earnings per share.
  • Although ATHM's debt-to-equity ratio of 0.04 is very low, it is currently higher than that of the industry average. To add to this, ATHM has a quick ratio of 2.46, which demonstrates the ability of the company to cover short-term liquidity needs.
  • The company's current return on equity has remained constant since the same quarter one year prior. Compared to other companies in the Internet Software & Services industry and the overall market, AUTOHOME INC -ADR's return on equity exceeds that of both the industry average and the S&P 500.
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly underperformed compared to the Internet Software & Services industry average, but is greater than that of the S&P 500. The net income increased by 1.8% when compared to the same quarter one year prior, going from $39.95 million to $40.67 million.
  • ATHM's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 46.12%, which is also worse than the performance of the S&P 500 Index. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.

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