YY - Slaughtered after earnings
Updated
The fundamentals:
YY is a Chinese company with a popular streaming platform. Below is the summary of their latest earnings report:
YY reported revenue of $518 million, beating analyst estimates for $487.8 million and up 43% in local currency. It reported adjusted earnings of $1.72 per share, beating Wall Street's view of $1.52
With social platforms, it is beneficial to consider active user growth in addition to the top and bottom line. "Its monthly active user base for mobile livestreaming service rose 24% from the year-ago period to more than 77.6 million"
Analysts are optimistic about YY's future, with the majority upgrading to a Buy/Strong buy.
The technicals:
The run up to earnings set expectations far too high, and it is only natural that YY is seeing a massive 10% slump immediately after, even with a beat, similar to NVDA. It should be noted that with this slump, YY has underperformed QQQ YTD. 50&200EMA still indicates that the bullish momentum is there.
The play:
A good entry level is around $108, where the price seemed to settle before the massive run up to $124 right before earnings. Options buyers should wait for IV to settle down more before taking a position.
YY is a Chinese company with a popular streaming platform. Below is the summary of their latest earnings report:
YY reported revenue of $518 million, beating analyst estimates for $487.8 million and up 43% in local currency. It reported adjusted earnings of $1.72 per share, beating Wall Street's view of $1.52
With social platforms, it is beneficial to consider active user growth in addition to the top and bottom line. "Its monthly active user base for mobile livestreaming service rose 24% from the year-ago period to more than 77.6 million"
Analysts are optimistic about YY's future, with the majority upgrading to a Buy/Strong buy.
The technicals:
The run up to earnings set expectations far too high, and it is only natural that YY is seeing a massive 10% slump immediately after, even with a beat, similar to NVDA. It should be noted that with this slump, YY has underperformed QQQ YTD. 50&200EMA still indicates that the bullish momentum is there.
The play:
A good entry level is around $108, where the price seemed to settle before the massive run up to $124 right before earnings. Options buyers should wait for IV to settle down more before taking a position.
Note
Options traders: YY's IV30 is currently around 50%, a fairly high figure even for the volatile stock.Stock price closed today at $104.71, rising slightly to $105.90 after-hours. Below $108 is a good entry level for long term plays.
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