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Bear of the Day: AutoHome (ATHM)

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The stock market has been in turmoil. Some industries have been beat down worse than others. For a time there, Chinese internet stocks were one of the worse places to be. Since May, there has been a bit of a turnaround in this downtrodden industry. Today’s Bear of the Day investigates whether this bounce is warranted or if the earnings story is still not supportive of the bounce.

I’m talking about Zacks Rank #5 (Strong Sell) AutoHome (ATHM). Autohome Inc. operates as an online destination for automobile consumers in the People's Republic of China. The company delivers interactive content and tools to automobile consumers through its three websites, autohome.com.cn, che168.com, and ttpai.cn on PCs, mobile devices, mobile applications, and mini apps. It provides media services, including automaker advertising services and regional marketing campaigns; and leads generation services comprising dealer subscription services, advertising services for individual dealers, and used automobile listing and other platform-based services. 

This year has been a rough one for AutoHome. The current year Zacks Consensus Estimate calls for $2.33 EPS for this year. That is a contraction of 28%. Over the last sixty days, three analysts have cut their earnings estimates for the current year, while one has hiked estimates. That has dropped current year estimates down from $2.62. Next year’s number is off from $3.13 to $2.68 as two analysts have cut estimates for next year.

The Internet – Services industry ranks in the Bottom 20% of our Zacks Industry Rank. There are some stocks in the good graces of our Zacks Rank in this industry. Those include Zacks Rank #1 (Strong Buy) Baidu (BIDU) as well as Zacks Rank #2 (Buy) HealthStream HSTM.


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