LightInTheBox (LITB) Stock Rises After Baidu Partnership

NEW YORK (TheStreet) -- Shares of online retailer LightInTheBox  (LITB) surged 9.07% to $8.22 in morning trading Tuesday after the company announced a partnership with Chinese web services giant Baidu  (BIDU) .

Baidu will promote and distribute LightInTheBox's products and apps, which should provide a larger audience for the retailer. In return, LightInTheBox will provide Baidu with additional monetization capability for its app distribution.

"We are very excited to have the strategic partnership with Baidu Dianxin to help explore global market opportunities," said Alan Guo, chairman and CEO of LightInTheBox, in a statement. "This is a great example of two Chinese Internet companies working together to expand in global markets."

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More than 1.2 million shares had changed hands as of 10:27 a.m., compared to the average volume of 187,238.

Separately, TheStreet Ratings team rates LIGHTINTHEBOX HLDG -ADR as a "sell" with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:

"We rate LIGHTINTHEBOX HLDG -ADR (LITB) a SELL. This is driven by a few notable 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 company's weaknesses can be seen in multiple areas, such as its feeble growth in its earnings per share and deteriorating net income."

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

  • LIGHTINTHEBOX HLDG -ADR has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. For the next year, the market is expecting a contraction of 175.0% in earnings (-$0.44 versus -$0.16).
  • 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 Internet & Catalog Retail industry. The net income has significantly decreased by 975.9% when compared to the same quarter one year ago, falling from $0.65 million to -$5.68 million.
  • 40.08% is the gross profit margin for LIGHTINTHEBOX HLDG -ADR which we consider to be strong. Regardless of LITB's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, LITB's net profit margin of -6.32% significantly underperformed when compared to the industry average.
  • Compared to other companies in the Internet & Catalog Retail industry and the overall market, LIGHTINTHEBOX HLDG -ADR's return on equity significantly trails that of both the industry average and the S&P 500.
  • The share price of LIGHTINTHEBOX HLDG -ADR has not done very well: it is down 17.71% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter.
  • You can view the full analysis from the report here: LITB Ratings Report

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