NEW YORK (TheStreet) -- Qunar Cayman Islands (QUNR) stock is higher by 9.40% to $39.93 in late-afternoon trading on Monday, before the release of the company's 2015 third quarter financial results, due out after Tuesday's market close.
Analysts are expecting the company to post a year-over-year decline in earnings and rise in revenue.
Analysts surveyed by Thomson Reuters have forecast for a loss of 86 cents per ADS on revenue of $186.42 million for the most recent quarter.
Last year, the company reported a loss of 78 cents per ADS on revenue of $81.6 million for the 2014 third quarter.
Qunar Cayman Islands is a mobile and online travel platform based in Beijing.
Separately, TheStreet Ratings team rates QUNAR CAYMAN ISLANDS -ADR as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:
We rate QUNAR CAYMAN ISLANDS -ADR (QUNR) a SELL. 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 and generally high debt management risk.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- QUNAR CAYMAN ISLANDS -ADR 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, QUNAR CAYMAN ISLANDS -ADR reported poor results of -$2.53 versus -$0.24 in the prior year. For the next year, the market is expecting a contraction of 620.8% in earnings (-$18.24 versus -$2.53).
- 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 Internet & Catalog Retail industry. The net income has significantly decreased by 93.6% when compared to the same quarter one year ago, falling from -$67.96 million to -$131.56 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 Internet & Catalog Retail industry and the overall market, QUNAR CAYMAN ISLANDS -ADR's return on equity significantly trails that of both the industry average and the S&P 500.
- Currently the debt-to-equity ratio of 1.78 is quite high overall and when compared to the industry average, suggesting that the current management of debt levels should be re-evaluated. Regardless of the company's weak debt-to-equity ratio, QUNR has managed to keep a strong quick ratio of 1.85, which demonstrates the ability to cover short-term cash needs.
- The gross profit margin for QUNAR CAYMAN ISLANDS -ADR is currently very high, coming in at 75.19%. Regardless of QUNR's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, QUNR's net profit margin of -92.59% significantly underperformed when compared to the industry average.
- You can view the full analysis from the report here: QUNR
Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of Jim Cramer, TheStreet or any of its contributors.