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YY (YY) Stock Sinks As Market Gains: What You Should Know

Zacks Equity Research

YY (YY) closed the most recent trading day at $56.24, moving -0.5% from the previous trading session. This move lagged the S&P 500's daily gain of 1.3%. At the same time, the Dow added 1.21%, and the tech-heavy Nasdaq gained 1.39%.

Coming into today, shares of the social media company had lost 18.58% in the past month. In that same time, the Computer and Technology sector lost 4.48%, while the S&P 500 lost 4.84%.

Investors will be hoping for strength from YY as it approaches its next earnings release, which is expected to be August 13, 2019. In that report, analysts expect YY to post earnings of $0.88 per share. This would mark a year-over-year decline of 56.65%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $881.45 million, up 54.58% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $3.62 per share and revenue of $3.57 billion, which would represent changes of -49.23% and +51.34%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for YY. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Within the past 30 days, our consensus EPS projection has moved 48.66% lower. YY currently has a Zacks Rank of #5 (Strong Sell).

Digging into valuation, YY currently has a Forward P/E ratio of 15.61. Its industry sports an average Forward P/E of 24.27, so we one might conclude that YY is trading at a discount comparatively.

Also, we should mention that YY has a PEG ratio of 1.1. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Internet - Content industry currently had an average PEG ratio of 1.07 as of yesterday's close.

The Internet - Content industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 83, which puts it in the top 33% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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