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Fang Holdings Limited (SFUN - Free Report) reported dismal third-quarter 2018 results, with the top and the bottom line missing the Zacks Consensus Estimate.
Earnings per share of 2 cents missed the consensus mark by 3 cents and declined 33.3% year over year.
Total revenues of $83.6 million missed the consensus mark by roughly $24 million and declined 25.5% year over year. The decline was primarily due to weakness across listing and e-commerce services.
Fang’s top line has been weak in recent times particularly because of a decline in its e-commerce services revenues, which have been affected by the company’s reversion to a technology-driven platform model.
This probably impacted share price that has declined 57.8% over the past year against the 3.4% decline of the industry it belongs to. The stock is likely to recover upon completion of the transition and the company records improvement in revenues.
Let’s check out the numbers in detail.
Revenues by Segment
Listing services segment revenues declined 38% year over year to $29.2 million. Decreasing number of paying members resulted in the downfall. The segment accounted for 35% of total revenues.
Marketing services segment revenues decreased 4.1% year over year to $35.7 million. The segment contributed 43% to total revenues.
E-commerce services segment revenues declined 77.7% year over year to $3.7 million. Segment revenues were hurt by the company’s transition to a technology-driven open platform model. The segment accounted for 4% of total revenues.
Financial services segment revenues increased 34.6% year over year to $4.7 million. Rising demand for the company’s financial products drove segment revenues. The segment contributed 6% to total revenues.
Revenues from value-added services increased 33.3% year over year to $10.3 million, owing to growing demand for the company’s database and research services. The segment accounted for 12% of total revenues.
Profitability Performance
Gross profit decreased 14.2% from the year-ago quarter to $65.8 million. Adjusted EBITDA came in at $25.7 million compared with $24.8 million in the prior-year quarter. Operating income was $15.3 million, down 16.8% from the year-ago quarter due to reduction in revenue from listing services.
Operating expenses declined 13.4% year over year to $50.6 million. Selling expenses of $21 million were up 24.3% from the year-ago quarter due to increase in advertising and promotional expenses. General and administrative expenses were $29.8 million, down 28.5% on a year over year basis mainly due to effective cost control methods and decline in bad debt expenses.
Balance Sheet and Cash Flow
Fang Holdings had cash and cash equivalents, restricted cash (current and non-current) and short-term investments of $439.9 million compared with $481.8 million at the end of the prior quarter. Long-term loan was $124.4 million at the end of the quarter. Net cash generated from operating activities was $33.5 million in the reported quarter.
A few better-ranked stocks in the Zacks Business Services sector are WEX Inc. (WEX - Free Report) , Total System Services, Inc. and Paychex, Inc. (PAYX - Free Report) , each carrying a Zacks Rank #2 (Buy).
The long-term expected EPS (three to five years) growth rate for WEX, Total System Services and Paychex is 15%, 14.2%, and 8.5%, respectively.
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It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
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Fang Holdings (SFUN) Misses Q3 Earnings, Revenue Estimates
Fang Holdings Limited (SFUN - Free Report) reported dismal third-quarter 2018 results, with the top and the bottom line missing the Zacks Consensus Estimate.
Earnings per share of 2 cents missed the consensus mark by 3 cents and declined 33.3% year over year.
Total revenues of $83.6 million missed the consensus mark by roughly $24 million and declined 25.5% year over year. The decline was primarily due to weakness across listing and e-commerce services.
Fang’s top line has been weak in recent times particularly because of a decline in its e-commerce services revenues, which have been affected by the company’s reversion to a technology-driven platform model.
Fang Holdings Limited Revenue (TTM)
Fang Holdings Limited Revenue (TTM) | Fang Holdings Limited Quote
This probably impacted share price that has declined 57.8% over the past year against the 3.4% decline of the industry it belongs to. The stock is likely to recover upon completion of the transition and the company records improvement in revenues.
Let’s check out the numbers in detail.
Revenues by Segment
Listing services segment revenues declined 38% year over year to $29.2 million. Decreasing number of paying members resulted in the downfall. The segment accounted for 35% of total revenues.
Marketing services segment revenues decreased 4.1% year over year to $35.7 million. The segment contributed 43% to total revenues.
E-commerce services segment revenues declined 77.7% year over year to $3.7 million. Segment revenues were hurt by the company’s transition to a technology-driven open platform model. The segment accounted for 4% of total revenues.
Financial services segment revenues increased 34.6% year over year to $4.7 million. Rising demand for the company’s financial products drove segment revenues. The segment contributed 6% to total revenues.
Revenues from value-added services increased 33.3% year over year to $10.3 million, owing to growing demand for the company’s database and research services. The segment accounted for 12% of total revenues.
Profitability Performance
Gross profit decreased 14.2% from the year-ago quarter to $65.8 million. Adjusted EBITDA came in at $25.7 million compared with $24.8 million in the prior-year quarter. Operating income was $15.3 million, down 16.8% from the year-ago quarter due to reduction in revenue from listing services.
Operating expenses declined 13.4% year over year to $50.6 million. Selling expenses of $21 million were up 24.3% from the year-ago quarter due to increase in advertising and promotional expenses. General and administrative expenses were $29.8 million, down 28.5% on a year over year basis mainly due to effective cost control methods and decline in bad debt expenses.
Balance Sheet and Cash Flow
Fang Holdings had cash and cash equivalents, restricted cash (current and non-current) and short-term investments of $439.9 million compared with $481.8 million at the end of the prior quarter. Long-term loan was $124.4 million at the end of the quarter. Net cash generated from operating activities was $33.5 million in the reported quarter.
Zacks Rank & Other Stocks to Consider
Currently, Fang Holdings carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
A few better-ranked stocks in the Zacks Business Services sector are WEX Inc. (WEX - Free Report) , Total System Services, Inc. and Paychex, Inc. (PAYX - Free Report) , each carrying a Zacks Rank #2 (Buy).
The long-term expected EPS (three to five years) growth rate for WEX, Total System Services and Paychex is 15%, 14.2%, and 8.5%, respectively.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
See Them Free>>