In our last article on eLong (NASDAQ:LONG), we were interested in the name but were concerned about profitability issues as well as potential upside. Thus far, the company's price has not moved much since our September article as issues with profits have continued to plague high growth. Today, we are updating our model to now move to a Sell-rating with a $14 target. We have become very concerned about profits more than before due to drastic spending cuts from the Chinese government and an oversaturation of luxury hotels for eLong in its inventory that are not paying off. Upside in revenue means little in the next 2-3 years as the company will still see significant profit issues.
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