NEW YORK (TheStreet) -- One Horizon Group (OHGI) stock is soaring 44.13% to $1.47 on heavy trading volume Wednesday after the company announced earlier today that it was upgrading its China mobile voice over IP (VoIP) Aishuo app to allow the purchase of communication stickers.
"Our deployment in China has exceeded all our internal forecasts and roll-out modeling," CEO Brian Collins stated. "Now we're pushing even further across the Chinese social media market with the addition of the massively popular sticker communication feature."
Specifically, communication stickers are a combination of both cartoons and smiley-like emojis, giving users a new way of communicating with others.
This action was taken as the company saw an "overwhelming growth" of the app, with over 12 million downloads in the past nine months.
Consequently, this puts the company's growth trajectory 18 months ahead of its projected targets to acquire 15 million app subscribers over a two-year period.
Due to this accelerated efforts, Aishuo revenues have increased for a third consecutive 100% growth quarter, the company said.
As of 10:15 a.m., nearly 4 million shares were changing hands, above its average trading volume of about 240,000 shares.
Based in Ireland, One Horizon Group, through its subsidiaries, develops and licenses software solutions to telecommunications operators in Europe, Asia, the Russian Federation, and the U.S.
Recently, 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 articles's author. TheStreet Ratings has this to say about the recommendation:
We rate ONE HORIZON GROUP INC as a Sell with a ratings score of D. This is driven by a few notable 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, weak operating cash flow and generally disappointing historical performance in the stock itself.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- ONE HORIZON GROUP INC 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, ONE HORIZON GROUP INC swung to a loss, reporting -$0.07 versus $0.04 in the prior year. For the next year, the market is expecting a contraction of 78.6% in earnings (-$0.13 versus -$0.07).
- 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 Diversified Telecommunication Services industry. The net income has significantly decreased by 360.6% when compared to the same quarter one year ago, falling from -$0.35 million to -$1.60 million.
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Diversified Telecommunication Services industry and the overall market, ONE HORIZON GROUP INC's return on equity significantly trails that of both the industry average and the S&P 500.
- Net operating cash flow has decreased to -$0.70 million or 44.05% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 50.00%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 400.00% compared to the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
- You can view the full analysis from the report here: OHGI