NEW YORK (TheStreet) -- Shares of YOU On Demand (YOD) were gaining 43.4% to $2.94 Monday after the Chinese video on demand service announced a new licensing agreement with Twentieth Century Fox Television Distribution (FOXA) .
Under the new licensing agreement a wide library of feature films will be available to YOU On Demand subscribers through its subscription VOD platform via mobile, over-the-top, digital cable, and IPTV services.
"Twentieth Century Fox's award-winning and blockbuster films demonstrate YOU On Demand's continued commitment to deliver the best premium content to our customers," YOU On Demand chairman Shane McMahon said. "We are excited to be working with them in China as we bring their diverse library to all YOU On Demand platforms."
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TheStreet Ratings team rates YOU ON DEMAND HOLDINGS INC as a Sell with a ratings score of D-. TheStreet Ratings Team has this to say about their recommendation:
"We rate YOU ON DEMAND HOLDINGS INC (YOD) 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 deteriorating net income, disappointing return on equity and generally disappointing historical performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- 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 Media industry. The net income has significantly decreased by 161.4% when compared to the same quarter one year ago, falling from $3.17 million to -$1.95 million.
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Media industry and the overall market, YOU ON DEMAND HOLDINGS INC's return on equity significantly trails that of both the industry average and the S&P 500.
- YOD has underperformed the S&P 500 Index, declining 21.41% 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.
- YOU ON DEMAND HOLDINGS INC 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. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, YOU ON DEMAND HOLDINGS INC continued to lose money by earning -$0.89 versus -$1.19 in the prior year. For the next year, the market is expecting a contraction of 18.0% in earnings (-$1.05 versus -$0.89).
- Net operating cash flow has slightly increased to -$2.50 million or 9.72% when compared to the same quarter last year. Despite an increase in cash flow, YOU ON DEMAND HOLDINGS INC's average is still marginally south of the industry average growth rate of 17.19%.
- You can view the full analysis from the report here: YOD Ratings Report