NEW YORK (TheStreet) -- Shares of DreamWorks Animation SKG Inc. (DWA) are falling -11.85% to $24.11 on Monday morning despite the company's latest animated film "How to Train Your Dragon 2" earning $50 million during its weekend opening, making it the number two movie in the U.S. after "22 Jump Street."
Some analysts were expecting the sequel to earn $65 million, but the film is on the right track to beat the original movie's $217 million in domestic earnings, Motley Fool reports.
DreamWorks also announced the launch of its own YouTube channel, DreamWorksTV, which will feature original programing, including animated and live-action series, geared toward families.
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Separately, TheStreet Ratings team rates DREAMWORKS ANIMATION INC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate DREAMWORKS ANIMATION INC (DWA) 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 revenue growth, largely solid financial position with reasonable debt levels by most measures and notable return on equity. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, weak operating cash flow and feeble growth in the company's earnings per share."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Despite its growing revenue, the company underperformed as compared with the industry average of 14.8%. Since the same quarter one year prior, revenues slightly increased by 9.3%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- DWA's debt-to-equity ratio is very low at 0.22 and is currently below that of the industry average, implying that there has been very successful management of debt levels.
- 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 Media industry. The net income has significantly decreased by 869.9% when compared to the same quarter one year ago, falling from $5.58 million to -$42.94 million.
- Net operating cash flow has significantly decreased to -$12.49 million or 129.95% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- You can view the full analysis from the report here: DWA Ratings Report