How Will China Finance Online (JRJC) Stock React To Its 2014 First Quarter Results?

NEW YORK (TheStreet) -- China Financial Online Co. (JRJC) issued its 2014 first quarter earnings report this afternoon and posted an increase in net revenue to $23.2 million, from $5.5 million for the same period in 2013.

The company, which provides vertically integrated financial services through web portals, software systems, and mobile handsets, reported a net loss of -$2 million for the most recent quarter, compared to a net loss of -$4.3 million for the 2013 first quarter.

Net income loss, on a per basic and diluted share basis, was -2 cents for the 2014 first quarter and -4 cents for the year ago period.

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Separately, TheStreet Ratings team rates CHINA FINANCE ONLINE CO -ADR as a Sell with a ratings score of D+. TheStreet Ratings Team has this to say about their recommendation:

"We rate CHINA FINANCE ONLINE CO -ADR (JRJC) 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 area that we feel has been the company's primary weakness has been its disappointing return on equity."

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

  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Internet Software & Services industry and the overall market, CHINA FINANCE ONLINE CO -ADR's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for CHINA FINANCE ONLINE CO -ADR is currently very high, coming in at 76.75%. It has increased significantly from the same period last year. Regardless of the strong results of the gross profit margin, the net profit margin of -8.56% is in-line with the industry average.
  • CHINA FINANCE ONLINE CO -ADR reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. During the past fiscal year, CHINA FINANCE ONLINE CO -ADR continued to lose money by earning -$0.41 versus -$0.54 in the prior year.
  • 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 54.0% when compared to the same quarter one year prior, rising from -$4.32 million to -$1.99 million.
  • This stock has increased by 231.91% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the future course of this stock, we feel that the risks involved in investing in JRJC do not compensate for any future upside potential, despite the fact that it has seen nice gains over the past 12 months.
  • You can view the full analysis from the report here: JRJC Ratings Report
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