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Cheetah Mobile Reported Mixed Results for Fiscal 3Q15

Gabriel Kane

Cheetah Mobile's Revenue Rose and Income Fell in Fiscal 3Q15

Cheetah Mobile’s price movement

Cheetah Mobile (CMCM) has a market cap of $2.6 billion. Cheetah Mobile’s YTD (year-to-date) price movement was a mix of rises and falls in fiscal 2015. After the earnings report for 3Q15, Cheetah Mobile rose by 5.7% to close at $18.14 per share as of November 17, 2015. The price movement on a weekly, monthly, and YTD basis is -0.11%, -2.2%, and 20.0%, respectively.

Technically, the stock broke the support of the 20-day, 50-day, and 200-day moving averages throughout 2015. Currently, Cheetah Mobile is trading 4.4% below its 20-day moving average, 2.6% above its 50-day moving average, and 19.2% below its 200-day moving average.

The Guggenheim Spin-Off ETF (CSD) invests 3.1% of its holdings in Cheetah Mobile. CSD tracks an index of US-listed stocks spun off from corporate parents over the past 30 months. The index holds different sizes of companies. CSD’s YTD price movement was -10.2% as of November 16, 2015.

Cheetah Mobile’s competitors and their market caps are:

  • Baidu (BIDU) – $68.0 billion
  • Qihoo 360 Technology (QIHU) – $8.2 billion
  • Sohu.com (SOHU) – $2.0 billion

Cheetah Mobile’s performance in 3Q15

The company reported total revenue of $158.7 million in 3Q15—a rise of 13.0% compared to the total revenue of $140.4 million in 2Q15. The revenue from online marketing services rose by 16.7%. The revenue from Internet value-added services and Internet security services fell by 10.8% and 2.8%, respectively, on a quarterly basis in 3Q15. The revenue from PC-based applications fell by 4.0%. The revenue from mobile-based applications rose by 22.3% on a quarterly basis in 3Q15.

The cost of revenue as a percentage of sales and gross profit rose by 4.0% and 11.2%, respectively, in 3Q15. Its net income, EPS (earnings per share), and earnings per ADS (American depositary share) fell to $4.5 million, $0.00, and $0.03, respectively, in 3Q15—compared to the net income, EPS, and earnings per ADS of $9.7 million, $0.01, and $0.07, respectively, in 2Q15.

Meanwhile, the cash and cash equivalents and accounts receivable rose by 12.5% and 22.2%, respectively, on a quarterly basis in 3Q15. The company’s current ratio fell to 1.91. Cheetah Mobile’s DE (debt-to-equity) ratio rose to 0.52 in 3Q15. The current and DE ratios were 2.08 and 0.45, respectively, in 2Q15.

The company projected the total revenue to be $175.0–$183.0 million for 4Q15.

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