Why Youku Tudou (YOKU) Stock Is Falling Today

NEW YORK (TheStreet) -- Youku Tudou Inc. (YOKU) is down 6.84% to $25.61 as it continues to fall after news the China-base online television company's TV drama viewership for the first quarter fell significantly.

A report from T.H Capital analysts shows Youku's average daily viewers for the period between Jan. 1, 2014 and March 25, 2014 were 25 million, down from 56 million in the fourth quarter of 2013.

The firm also believes daily views for Youku's in-house professional content did not see a significant growth of 41.3 million from 35.4 million.

Youku is still struggling to buy the rights of numerous popular Chinese TV dramas as it continues to compete against other online TV streaming platforms such as Baidu (BIDU), Sohu (SOHU) and Tencent (TCEHY).

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TheStreet Ratings team rates YOUKU TUDOU INC as a Hold with a ratings score of C-. TheStreet Ratings Team has this to say about their recommendation:

"We rate YOUKU TUDOU INC (YOKU) 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 robust revenue growth, largely solid financial position with reasonable debt levels by most measures and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity, poor profit margins and feeble growth in the company's earnings per share."

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