Why E-House China Holdings (EJ) Is Up Today

NEW YORK (TheStreet) -- E-House China Holdings  (EJ) rose in after-hours trading on Monday in the wake of a bullish report from Goldman Sachs.

The firm maintained its "buy" rating on the stock and said property data indicates the company would meet the firm's expectations of $22 million in non-GAAP net income in the second quarter. The firm also believes mobile will drive upside.

The stock rose 0.82% to $9.72 in after-hours trading. E-House had closed up 2.99% to $9.64 on Monday. More than 3.25 million shares changed hands, compared to the average volume of 1,903,350.

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Separately, TheStreet Ratings team rates E-HOUSE CHINA HOLDINGS -ADR as a "hold" with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:

"We rate E-HOUSE CHINA HOLDINGS -ADR (EJ) 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 solid stock price performance. However, as a counter to these strengths, we find that the company's return on equity has been disappointing."

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

  • The revenue growth greatly exceeded the industry average of 33.3%. Since the same quarter one year prior, revenues rose by 40.0%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • EJ's debt-to-equity ratio is very low at 0.14 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 2.51, which clearly demonstrates the ability to cover short-term cash needs.
  • The gross profit margin for E-HOUSE CHINA HOLDINGS -ADR is rather high; currently it is at 63.86%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 1.77% trails the industry average.
  • 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. When compared to other companies in the Real Estate Management & Development industry and the overall market, E-HOUSE CHINA HOLDINGS -ADR's return on equity is below that of both the industry average and the S&P 500.
  • You can view the full analysis from the report here: EJ Ratings Report

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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