Why LiveDeal (LIVE) Is Rising Today

NEW YORK (TheStreet) -- LiveDeal (LIVE) skyrocketed by 47% to $8.39 a share on Tuesday after CEO Jon Isaac announced that he has collaborated with about 1,000 restaurants in the San Diego area, which accounts for about 20% of the dining locations in the area. 

Volume of about 975,000 shares was approximately 20 times more than its average volume of 48,000.

The company's service at www.livedeal.com is similar to services offered by Groupon  (GRPN) or LivingSocial, but LiveDeal's geo-location feature allows restaurants to send out deals to customers in real-time. In essence, the flexibility allows the establishments to create any kind of deal they want at anytime they want. Customers also interact directly with the restaurants once they find a deal through LiveDeal, eliminateing the need for LiveDeal to act as a go-between and for customers to sign up with and enter their credit card information into the site.

At the moment, LiveDeal features restaurants in both San Diego Los Angeles counties.

TheStreet Ratings team rates LIVEDEAL INC as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about its recommendation:

"We rate LIVEDEAL INC (LIVE) a SELL. This is driven by multiple 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 deteriorating net income, disappointing return on equity and weak operating cash flow."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • 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 80.8% when compared to the same quarter one year ago, falling from -$0.28 million to -$0.51 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, LIVEDEAL INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has significantly decreased to -$0.29 million or 332.25% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • The gross profit margin for LIVEDEAL INC is currently very high, coming in at 70.63%. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, LIVE's net profit margin of -84.15% significantly underperformed when compared to the industry average.
  • The revenue fell significantly faster than the industry average of 9.2%. Since the same quarter one year prior, revenues fell by 22.1%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
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