Trade-Ideas LLC identified

Cheetah Mobile

(

CMCM

) as a "dead cat bounce" (down big yesterday but up big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Cheetah Mobile as such a stock due to the following factors:

  • CMCM has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $20.8 million.
  • CMCM has traded 61,772 shares today.
  • CMCM is up 3.2% today.
  • CMCM was down 5.5% yesterday.

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More details on CMCM:

Cheetah Mobile Inc. operates a platform that offer mobile and personal computer (PC) applications for users and global content distribution channels in China. CMCM has a PE ratio of 109. Currently there are no analysts that rate Cheetah Mobile a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for Cheetah Mobile has been 926,200 shares per day over the past 30 days. Cheetah Mobile has a market cap of $1.6 billion and is part of the technology sector and computer software & services industry. Shares are down 31.2% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Cheetah Mobile as a

hold

. 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 and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself and unimpressive growth in net income.

Highlights from the ratings report include:

  • CMCM's very impressive revenue growth greatly exceeded the industry average of 9.9%. Since the same quarter one year prior, revenues leaped by 51.1%. 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.
  • CMCM's debt-to-equity ratio is very low at 0.05 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, CMCM has a quick ratio of 1.57, which demonstrates the ability of the company to cover short-term liquidity needs.
  • CHEETAH MOBILE INC -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. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, CHEETAH MOBILE INC -ADR increased its bottom line by earning $0.18 versus $0.08 in the prior year. This year, the market expects an improvement in earnings ($2.02 versus $0.18).
  • 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 Software industry. The net income has significantly decreased by 66.5% when compared to the same quarter one year ago, falling from $4.96 million to $1.66 million.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 65.85%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 100.00% compared to the year-earlier quarter. Although its share price is down sharply from a year ago, do not assume that it can now be tagged as cheap and attractive. The reality is that, based on its current price in relation to its earnings, CMCM is still more expensive than most of the other companies in its industry.

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