Autohome (ATHM - Free Report) is a Zacks Rank #5 (Strong Sell) and it is the Bear of the Day today. I try to avoid almost all Chinese stocks and not just because of the trade war or tariff tantrums that have hit the market of late. I simply do not trust the accounting and audits of these stocks as I have seen too many frauds come out of China. That said, I do not know if ATHM is a fraud or not, but I do know that estimates are falling and that is not what we want to see.
Autohome Inc. is the leading online destination for automobile consumers in China. Its mission is to enhance the car-buying and ownership experience for auto consumers in China. Autohome provides professionally produced and user-generated content, a comprehensive automobile library, and extensive automobile listing information to automobile consumers, covering the entire car purchase and ownership cycle.
ATHM recently posted a 3 cent beat of the Zacks Consensus Estimate which translated into a 3%positive earnings surprise. It is not that often we see a stock that recently beat become the Bear of the Day.
The main reason this stock has fallen to a Zacks Rank #5 (Strong Sell) is that the Zacks Consensus Estimate for 2018 and 2019 keeps moving lower.
30 days ago, the Zacks Consensus Estimate for 2018 was at $3.61, but it has since moved lower to $3.40.
Over the same time period, the Zacks Consensus Estimate for 2019 moved from $4.59 to $4.26.
A quick look at the chart and you can see the stock is down 50% from recent highs. The stock was near $120 at the start of the summer, but negative headlines and lower earnings estimates have pushed this stock down to the $80 range.
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