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Brean Capital Says 'PC Game Growth Uncertain,' For ChangYou.com

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Brean Capital on Tuesday issued a report on Changyou.Com Ltd (ADR) (NASDAQ: CYOU) after the company reported mixed fourth quarter results and provided first quarter 2015 guidance with both revenue growth and margin outlook exceeding expectations.

Currently Brean Capital covers Changyou.com Ltd. with a Hold rating.

Analysts Fawne Jiang and Long Lin wrote, "While we are encouraged to see the company's continued ramp up of mobile games with initial success of its mobile game TLBB 3D and margin recovery upon cost control, we believe there are still moving parts associated with CYOU's revenue and earnings growth due to the still early stage of mobile gaming with uncertainty in the performance of newly launched games, lower margin profile from increasing shift to mobile games and continued investment in gaming development."

Brean Capital calls the PC game growth "uncertain." Changyou.com Ltd. reported 184 million in online game revenue however earnings were only $0.25 per share while consensus estimates placed EPS at $0.29. Changyou.com's mobile game platform is still at an early stage and its margin trend faces some uncertainties with increasing contribution from mobile games offered by competitors.

The firm issued first quarter 2015 guidance of $195-200 million in revenue and EPS of $0.64-0.68 based on better cost control as a result of reducing investment in non-game related mobile products.

Changyou.com Ltd. closed Monday at $24.16.

Latest Ratings for CYOU

DateFirmActionFromTo
Oct 2017Deutsche BankUpgradesHoldBuy
Oct 2017Credit SuisseInitiates Coverage OnNeutral
Jun 2017MizuhoDowngradesUnderperform

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Posted-In: Brean Capital Fawne Jiang Long LinAnalyst Color Reiteration Analyst Ratings

 

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