DouYu International (DOYU - Free Report) is a live streaming video game company based in China. DOYU stock has climbed 60% in the last month, yet its price tag remains “cheap” and it’s poised to grow within the quickly-expanding international video game market.
Quick Stream
DouYu is a live streaming firm focused on the gaming and e-sports market in China. The company’s offerings operate across both PC and mobile apps and it boasts that it “has gained coveted access to a wide variety of premium eSports content.” DOYU, which went public in July 2019, has exclusive streaming rights to roughly 30 major tournaments in China, according to its IPO filing.
Investors can loosely think of DouYu as a Chinese Twitch—Amazon (AMZN - Free Report) bought Twitch in 2014 for roughly $1 billion—because it allows people to watch video games live like they are more traditional sports. The company is backed by Chinese social media and gaming powerhouse Tencent (TCEHY - Free Report) and it competes against fellow U.S.-listed HUYA Inc. Sponsored ADR (HUYA - Free Report) within the growing market.
Recent Resuls
Back on May 26, DouYu outperformed the high-end of its Q1 fiscal 2020 sales guidance, which jumped 53%. More specifically, its live streaming sales soared 56% to account for over 90% of revenue, while its advertising and other revenues division climbed 22%.
Meanwhile, its mobile monthly average users climbed 15% to 56.6 million, with its quarterly average paying user count up over 26% to 7.6 million. Plus, the company’s margins hit a record high. And DouYu topped our adjusted earnings estimate by 45% at $0.13 vs. $0.09. This bottom-line beat helped push its average positive earnings surprise to 128% over that trailing four periods.
Other Fundamentals
DOYU stock over the last month has soared 60% from just under $7 a share to $11.16 per share, as of the close of regular trading on Monday. This puts it just off the $11.50 per share all-time highs from its market debut in July 2019. The stock has also outpaced the broader gaming market since it went public, up 6% vs. its industry’s 20% average decline.
Despite outpacing its industry over the last year, DOYU currently trades at a discount against our Zacks Gaming Market, which includes Glu Mobile , Activision Blizzard , Electronic Arts (EA - Free Report) , and many more, at 2.4X forward 12-month sales estimates vs. 2.5X. This also marks a discount against its own highs of 2.8X.
Looking ahead, our Zacks estimates call for DouYu’s full-year fiscal 2020 revenue to climb over 29%, with FY21 expected to jump another 23% higher to hit $1.66 billion. And its adjusted FY20 EPS figure is projected to skyrocket 200% to $0.51 a share, with FY21 set to jump all the way to $0.68 per share.
Bottom Line
DouYu’s positive longer-term earnings revisions help it earn a Zacks Rank #1 (Strong Buy) at the moment, alongside its “B” for Momentum. And clearly investors might want to consider buying DUYO as a low-priced play on the booming global video game market that is projected to expand from $159 billion in 2020 to over $200 billion by 2023.
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This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
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DouYu International (DOYU - Free Report) is a live streaming video game company based in China. DOYU stock has climbed 60% in the last month, yet its price tag remains “cheap” and it’s poised to grow within the quickly-expanding international video game market.
Quick Stream
DouYu is a live streaming firm focused on the gaming and e-sports market in China. The company’s offerings operate across both PC and mobile apps and it boasts that it “has gained coveted access to a wide variety of premium eSports content.” DOYU, which went public in July 2019, has exclusive streaming rights to roughly 30 major tournaments in China, according to its IPO filing.
Investors can loosely think of DouYu as a Chinese Twitch—Amazon (AMZN - Free Report) bought Twitch in 2014 for roughly $1 billion—because it allows people to watch video games live like they are more traditional sports. The company is backed by Chinese social media and gaming powerhouse Tencent (TCEHY - Free Report) and it competes against fellow U.S.-listed HUYA Inc. Sponsored ADR (HUYA - Free Report) within the growing market.
Recent Resuls
Back on May 26, DouYu outperformed the high-end of its Q1 fiscal 2020 sales guidance, which jumped 53%. More specifically, its live streaming sales soared 56% to account for over 90% of revenue, while its advertising and other revenues division climbed 22%.
Meanwhile, its mobile monthly average users climbed 15% to 56.6 million, with its quarterly average paying user count up over 26% to 7.6 million. Plus, the company’s margins hit a record high. And DouYu topped our adjusted earnings estimate by 45% at $0.13 vs. $0.09. This bottom-line beat helped push its average positive earnings surprise to 128% over that trailing four periods.
Other Fundamentals
DOYU stock over the last month has soared 60% from just under $7 a share to $11.16 per share, as of the close of regular trading on Monday. This puts it just off the $11.50 per share all-time highs from its market debut in July 2019. The stock has also outpaced the broader gaming market since it went public, up 6% vs. its industry’s 20% average decline.
Despite outpacing its industry over the last year, DOYU currently trades at a discount against our Zacks Gaming Market, which includes Glu Mobile , Activision Blizzard , Electronic Arts (EA - Free Report) , and many more, at 2.4X forward 12-month sales estimates vs. 2.5X. This also marks a discount against its own highs of 2.8X.
Looking ahead, our Zacks estimates call for DouYu’s full-year fiscal 2020 revenue to climb over 29%, with FY21 expected to jump another 23% higher to hit $1.66 billion. And its adjusted FY20 EPS figure is projected to skyrocket 200% to $0.51 a share, with FY21 set to jump all the way to $0.68 per share.
Bottom Line
DouYu’s positive longer-term earnings revisions help it earn a Zacks Rank #1 (Strong Buy) at the moment, alongside its “B” for Momentum. And clearly investors might want to consider buying DUYO as a low-priced play on the booming global video game market that is projected to expand from $159 billion in 2020 to over $200 billion by 2023.
Zacks Top 10 Stocks for 2020In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2020?
Last year's 2019 Zacks Top 10 Stocks portfolio returned gains as high as +102.7%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.
Access Zacks Top 10 Stocks for 2020 today >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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