Cheetah Mobile (CMCM) Stock Tanks on Q2 Guidance

NEW YORK (TheStreet) -- Cheetah Mobile (CMCM) - Get Report stock is down 21.07% to $11.05 on heavy trading volume late Tuesday morning after issuing 2016 second quarter guidance that fell short of analysts' expectations. 

Before the market open, the Chinese mobile utility warned that current-quarter revenue will likely be between 975 million yuan and 1 billion yuan, or $149 million to $153 million. Analysts surveyed by Thomson Reuters are looking for revenue of 1.33 billion yuan.

"Contrary to our previous expectation of a seasonal rebound, revenues have not grown as anticipated in the early part of the second quarter," CEO Sheng Fu said in a statement. 

To combat the drop in sales, Cheetah has implemented several initiatives including promotions in key developed markets and a renewed focus on product launches, Fu added.

In all, Cheetah reported first quarter adjusted earnings of 0.71 yuan per ADR, beating analysts' estimates for 0.66 yuan per ADR. Revenue increased 57% year-over-year to 1.11 billion yuan, above estimates for 1.08 billion yuan. 

About 2.7 million shares of Cheetah have been traded so far today vs. its average trading volume of roughly 624,520 shares per day. 

Separately, TheStreet Ratings team rates the stock as a "hold" with a ratings score of C.

Cheetah's strengths such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures and impressive record of earnings per share growth are countered by the fact that the stock has had a generally disappointing performance in the past year.

You can view the full analysis from the report here: CMCM

TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this article's author.