NEW YORK (
) has been upgraded by TheStreet Ratings from hold to buy. 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, notable return on equity, attractive valuation levels and expanding profit margins. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.
Highlights from the ratings report include:
- The revenue growth greatly exceeded the industry average of 1.4%. Since the same quarter one year prior, revenues rose by 41.5%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- GA 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. To add to this, GA has a quick ratio of 1.86, which demonstrates the ability of the company to cover short-term liquidity needs.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Software industry and the overall market, GIANT INTERACTIVE GROUP -ADR's return on equity significantly exceeds that of both the industry average and the S&P 500.
- The gross profit margin for GIANT INTERACTIVE GROUP -ADR is currently very high, coming in at 86.20%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 49.60% significantly outperformed against the industry average.
Giant Interactive Group Inc. develops and operates online games in the People's Republic of China. It primarily offers multiplayer online role playing games (MMORPGs). The company operates 11 games, including nine MMORPGs, one casual massively multiplayer online game, and one strategy browser game. The company has a P/E ratio of 7.9, below the average diversified services industry P/E ratio of 9.3 and below the S&P 500 P/E ratio of 17.7. Giant Interactive Group has a market cap of $936.7 million and is part of the
industry. Shares are up 20.1% year to date as of the close of trading on Tuesday.
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-- Written by a member of TheStreet RatingsStaff