YY Inc. (YY) Earnings: What to Expect

NEW YORK (TheStreet) -- Social networking platform YY Inc. (YY) is due to report its fourth quarter after the bell Tuesday. 

For the three months to December, analysts surveyed by Thomson Reuters anticipate the China-based firm to report per-share earnings of 46 cents and net income of $27.07 million.

Revenue is expected to jump 97% year over year to $84.48 million. 

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TheStreet Ratings team rates YY INC -ADR as a Hold with a ratings score of C-. The team has this to say about their recommendation:

"We rate YY INC -ADR (YY) a HOLD. The primary factors that have impacted our rating are mixed -- some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its solid stock price performance, notable return on equity and robust revenue growth. However, as a counter to these strengths, we find that the company's profit margins have been poor overall."

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

  • Powered by its strong earnings growth of 227.27% and other important driving factors, this stock has surged by 324.92% over the past year, outperforming the rise in the S&P 500 Index during the same period.
  • Compared to other companies in the Internet Software & Services industry and the overall market, YY INC -ADR's return on equity exceeds that of both the industry average and the S&P 500.
  • YY has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 3.59, which clearly demonstrates the ability to cover short-term cash needs.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Internet Software & Services industry. The net income increased by 275.9% when compared to the same quarter one year prior, rising from $5.63 million to $21.15 million.
  • 49.00% is the gross profit margin for YY INC -ADR which we consider to be strong. Regardless of YY's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, YY's net profit margin of 26.45% compares favorably to the industry average.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

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