Bitauto (BITA) Stock Gains on Heavy Volume

NEW YORK (TheStreet) -- Bitauto (BITA) gained 11.5% to $91.07, hitting a lifetime high of $92.00, Monday on heavy volume.

More than 3.6 million shares of the Chinese online car marketplace were traded by market close, well above the average trading volume of about 1 million shares a day.

Bitauto recently announced plans to form a joint venture with Chinese auto dealer Lentuo (LAS) aimed at the high-end used car market.

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TheStreet Ratings team rates BITAUTO HOLDINGS LTD -ADR as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

"We rate BITAUTO HOLDINGS LTD -ADR (BITA) a BUY. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. 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, notable return on equity, impressive record of earnings per share growth and compelling growth in net income. We feel these strengths outweigh the fact that the company is trading at a premium valuation based on our review of its current price compared to such things as earnings and book value."

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

  • The revenue growth came in higher than the industry average of 19.9%. Since the same quarter one year prior, revenues rose by 47.4%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • BITA 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. Along with this, the company maintains a quick ratio of 2.69, which clearly demonstrates the ability to cover short-term cash needs.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Internet Software & Services industry and the overall market, BITAUTO HOLDINGS LTD -ADR's return on equity exceeds that of both the industry average and the S&P 500.
  • BITAUTO HOLDINGS LTD -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 two years. We feel that this trend should continue. During the past fiscal year, BITAUTO HOLDINGS LTD -ADR increased its bottom line by earning $0.95 versus $0.53 in the prior year. This year, the market expects an improvement in earnings ($1.68 versus $0.95).
  • 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 87.2% when compared to the same quarter one year prior, rising from $3.17 million to $5.94 million.
  • You can view the full analysis from the report here: BITA Ratings Report

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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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