Why LiveDeal (LIVE) Is Soaring Today

NEW YORK (TheStreet) -- LiveDeal  (LIVE) was rising 24.18% to $21.11 on Friday afternoon after the company announced that it has approved a three-for-one forward stock split of its common shares.

Stockholders will receive three shares of common stock for each share of common stock owned on the record date of Monday, Feb. 3, and the additional shares will be dispersed on Tuesday, Feb. 11 at the close of the business day. The split will go into effect at the opening of the trading day on Wednesday, Feb. 12. LiveDeal will also increase its authorized shares of common stock to 30 million from 10 million as part of the split.

LiveDeal is a deal service similar to Groupon  (GRPN) and LivingSocial, but it has differentiated itself by allowing local restaurants to offer deals in real time.

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

"We rate LIVEDEAL INC (LIVE) a SELL. This is driven by several 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, poor profit margins 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 decreased by 13.9% when compared to the same quarter one year ago, dropping from -$0.84 million to -$0.96 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.
  • The gross profit margin for LIVEDEAL INC is rather low; currently it is at 16.18%. It has decreased significantly from the same period last year. Along with this, the net profit margin of -155.50% is significantly below that of the industry average.
  • Net operating cash flow has significantly decreased to -$0.40 million or 300.00% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • LIVE, with its decline in revenue, slightly underperformed the industry average of 9.1%. Since the same quarter one year prior, revenues slightly dropped by 0.3%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • You can view the full analysis from the report here: LIVE Ratings Report

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