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Why Is SouFun (SFUN) Down 16.5% Since Last Earnings Report?
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A month has gone by since the last earnings report for SouFun (SFUN - Free Report) . Shares have lost about 16.5% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is SouFun due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
First-Quarter 2018 Results
Fang Holdings reported break-even earnings in the first quarter of 2018. Moreover, total revenues of $62.8 million were down 42.8% year over year. The massive downfall can be attributed to loss in e-commerce services business.
Revenues by Segment
Listing services segment revenues declined 21.5% year over year to $26.7 million. Decreasing number of paying members led to the downfall. The segment accounted for 42.6% of total revenues.
Marketing services segment revenues decreased 36.6% year over year to $17.3 million. Slowdown in the real estate market and continuous impact of tightening government policies weighed on segment revenues. The segment contributed 27.6% to total revenues.
E-commerce services segment revenues declined 82% year over year to $7.2 million. Segment revenues were hurt by the company’s transition to a technology-driven open platform model. The segment accounted for 11.4% of total revenues.
Financial services segment revenues increased 124.9% year over year to $5.1 million. Rise in secured consumer loans drove segment revenues. The segment contributed 8% to total revenues.
Revenue from other value-added services increased 4.1% year over year to $6.5 million, owing to growing demand for the company’s database and research services. The segment accounted for 10.4% of total revenues.
Operating Results
Gross profit decreased 13.3% from the year-ago quarter to $42.6 million. Adjusted EBITDA increased to $7.1 million from $1 million in the year-ago quarter.
Operating loss was $3.9 million compared with $6.1 million of operating loss in the prior-year quarter.
Operating expenses declined 15.8% year over year to $46.5 million. Selling expenses of $15.6 million were down 33.3% from the year-ago quarter, due to reduction in selling expenses associated with the company’s e-commerce services and advertising and promotional expenses. General and administrative expenses were $30.7 million, down 2% on a year-over- year basis.
Balance Sheet and Cash Flow
Fang Holdings had cash and cash equivalents, restricted cash (current and non-current) and short-term investments of $492.4 million compared with $547.1 million at the end of the prior quarter. Net cash used in operating activities was $7.0 million in the reported quarter.
Fiscal 2018 Outlook
For fiscal year 2018, Fang Holdings expects non-GAAP net income to be profitable.
How Have Estimates Been Moving Since Then?
Analysts were quiet during the last two month period as none of them issued any earnings estimate revisions.
VGM Scores
Currently, SouFun has an average Growth Score of C, however its momentum is doing a bit better with a B. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Our style scores indicate that the stock is more suitable for momentum investors than growth investors.
Outlook
SouFun has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.
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Why Is SouFun (SFUN) Down 16.5% Since Last Earnings Report?
A month has gone by since the last earnings report for SouFun (SFUN - Free Report) . Shares have lost about 16.5% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is SouFun due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
First-Quarter 2018 Results
Fang Holdings reported break-even earnings in the first quarter of 2018. Moreover, total revenues of $62.8 million were down 42.8% year over year. The massive downfall can be attributed to loss in e-commerce services business.
Revenues by Segment
Listing services segment revenues declined 21.5% year over year to $26.7 million. Decreasing number of paying members led to the downfall. The segment accounted for 42.6% of total revenues.
Marketing services segment revenues decreased 36.6% year over year to $17.3 million. Slowdown in the real estate market and continuous impact of tightening government policies weighed on segment revenues. The segment contributed 27.6% to total revenues.
E-commerce services segment revenues declined 82% year over year to $7.2 million. Segment revenues were hurt by the company’s transition to a technology-driven open platform model. The segment accounted for 11.4% of total revenues.
Financial services segment revenues increased 124.9% year over year to $5.1 million. Rise in secured consumer loans drove segment revenues. The segment contributed 8% to total revenues.
Revenue from other value-added services increased 4.1% year over year to $6.5 million, owing to growing demand for the company’s database and research services. The segment accounted for 10.4% of total revenues.
Operating Results
Gross profit decreased 13.3% from the year-ago quarter to $42.6 million. Adjusted EBITDA increased to $7.1 million from $1 million in the year-ago quarter.
Operating loss was $3.9 million compared with $6.1 million of operating loss in the prior-year quarter.
Operating expenses declined 15.8% year over year to $46.5 million. Selling expenses of $15.6 million were down 33.3% from the year-ago quarter, due to reduction in selling expenses associated with the company’s e-commerce services and advertising and promotional expenses. General and administrative expenses were $30.7 million, down 2% on a year-over- year basis.
Balance Sheet and Cash Flow
Fang Holdings had cash and cash equivalents, restricted cash (current and non-current) and short-term investments of $492.4 million compared with $547.1 million at the end of the prior quarter. Net cash used in operating activities was $7.0 million in the reported quarter.
Fiscal 2018 Outlook
For fiscal year 2018, Fang Holdings expects non-GAAP net income to be profitable.
How Have Estimates Been Moving Since Then?
Analysts were quiet during the last two month period as none of them issued any earnings estimate revisions.
VGM Scores
Currently, SouFun has an average Growth Score of C, however its momentum is doing a bit better with a B. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Our style scores indicate that the stock is more suitable for momentum investors than growth investors.
Outlook
SouFun has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.