NEW YORK (
) has been reiterated by TheStreet Ratings as a hold with a ratings score of C- . The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and a generally disappointing performance in the stock itself.
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Highlights from the ratings report include:
- SINA's revenue growth trails the industry average of 35.4%. Since the same quarter one year prior, revenues slightly increased by 6.0%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- SINA's debt-to-equity ratio is very low at 0.00 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 4.17, which clearly demonstrates the ability to cover short-term cash needs.
- 46.10% is the gross profit margin for SINA CORP which we consider to be strong. Regardless of SINA's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, SINA's net profit margin of -12.90% significantly underperformed when compared to the industry average.
- 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 Software & Services industry. The net income has significantly decreased by 191.6% when compared to the same quarter one year ago, falling from $15.01 million to -$13.74 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 Software & Services industry and the overall market, SINA CORP's return on equity significantly trails that of both the industry average and the S&P 500.
SINA Corporation provides online media and mobile value-added services (MVAS) in the People's Republic of China. It provides advertising, non-advertising, and free services through SINA.com, Weibo.com, and SINA Mobile. SINA has a market cap of $3.02 billion and is part of the
industry. Shares are down 11.2% year to date as of the close of trading on Thursday.
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--Written by a member of TheStreet Ratings Staff.
TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.