Chinese social media company YY Inc (ADR) (YY) reported earnings earlier this month, and Q3 was another solid report for YY. YY allows users to create groups online and share in a wide range of activities like music, educational programs, games, sporting events and even dating.
YY reported that revenues increased by 105.3% and earnings soared by increased by 122.0%. Online music and entertainment were the strongest drivers of the fantastic quarter with 123% revenue growth yea rover year. YY stock is also growing very fast. Quarter-over-quarter sales growth for the service that just started last year was 119.0%. It was the fourth consecutive positive earnings surprise for YY, and analysts were raising their estimates following the great quarter.
CEO David Xueling Li is confident that the good times will continue. In the YY press release, he commented:
“Having amassed a solid base of over 105 million average monthly active users for the third quarter of 2014, we are confident that by providing a comprehensive talents and services marketplace for our vast number of users, we will further heighten user stickiness on our platform and elevate the barriers that fortify our leading position as a revolutionary real-time interactive social platform in China.”
For the fourth quarter, YY expects its net revenues to be between RMB1.08 billion and RMB1.10 billion, representing a year over year growth of approximately 76% to 80%. Analysts expect YY to earn 83 cents per share in the quarter compared to just 60 cents per share in the year ago quarter. The consensus for the next five years is for earnings growth that average a blistering 70% annually
While many observers have continually challenged the potential of YY shares Portfolio Grader has stayed on point with this stock. YY shares have been ranked either “buy” or “strong buy” for the last year. Investors who ignored discussion of concerns about Chinese stocks and social media in the country have enjoyed gains of more than 40% as YY stock reacted positively to the strong fundamentals.
YY stock is currently ranked “B” by Portfolio Grader and remains a “buy” at the current price.
Louis Navellier is a renowned growth investor. He is the editor of five investing newsletters: Blue Chip Growth, Emerging Growth, Ultimate Growth, Family Trust and Platinum Growth. His most popular service, Blue Chip Growth, has a track record of beating the market 3:1 over the last 14 years. He uses a combination of quantitative and fundamental analysis to identify market-beating stocks. Mr. Navellier has made his proven formula accessible to investors via his free, online stock rating tool, PortfolioGrader.com. Louis Navellier may hold some of the aforementioned securities in one or more of his newsletters.
