NEW YORK (TheStreet) -- LiveDeal (LIVE) stock is sliding following a surge in its share price at the end of last week. On Friday, the internet company said it has a current cash position of almost $10 million, which it intends to invest in the company's expected growth through acquisition. Two weeks earlier, the company said it had acquired deals site DealTicker.com.
By midmorning, shares had tumbled 9.7% to $3.99. Trading volume of 2.5 million shares was almost double its three-month daily average.
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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. Among the areas we feel are negative, one of the most important has been an overall disappointing return on equity."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- 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 currently very high, coming in at 79.60%. Regardless of LIVE's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, LIVE's net profit margin of -68.80% significantly underperformed when compared to the industry average.
- Net operating cash flow has slightly increased to -$0.24 million or 7.25% when compared to the same quarter last year. Despite an increase in cash flow, LIVEDEAL INC's cash flow growth rate is still lower than the industry average growth rate of 23.25%.
- LIVEDEAL INC reported significant earnings per share improvement in the most recent quarter compared to 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, LIVEDEAL INC reported poor results of -$0.66 versus -$0.26 in the prior year. This year, the market expects an improvement in earnings (-$0.19 versus -$0.66).
- LIVE 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. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.84 is somewhat weak and could be cause for future problems.
- You can view the full analysis from the report here: LIVE Ratings Report