NEW YORK (TheStreet) -- Shares of DreamWorks Animation SKG Inc. (DWA) are lower by 5.33% to $22.57 in mid-afternoon trading on Monday, as the studio's latest animated feature "Penguins of Madagascar" failed to meet box office expectations.
Having debuted last week, the filmed earned $35 million over the five-day Thanksgiving holiday, falling short of the $45 million to $48 million the family feature was expected to earn, Variety reports.
"Movies are going to be the driving factor with their stock price and the movie business is often very hit and miss, and they seem to have gotten it wrong several times now," an analyst with Ascendiant Capital Markets told Variety.STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.
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 compelling growth in net income. However, as a counter to these strengths, we also find weaknesses including weak operating cash flow and a generally disappointing performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- DWA's revenue growth has slightly outpaced the industry average of 8.9%. Since the same quarter one year prior, revenues rose by 17.0%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- The current debt-to-equity ratio, 0.36, is low and is below the industry average, implying that there has been successful management of debt levels.
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500, but is less than that of the Media industry average. The net income increased by 18.5% when compared to the same quarter one year prior, going from $10.06 million to $11.93 million.
- DWA has underperformed the S&P 500 Index, declining 24.67% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
- Net operating cash flow has significantly decreased to -$74.21 million or 246.24% 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