Strong Revenue Momentum, Mobile Monetization Make Cheetah A Compelling Long-Term Investment
- Cheetah Mobile is one of the top beneficiaries of the rising use of internet in China.
- Revenue is growing in triple digits, and mobile revenue growth is particularly strong.
- Heavy spending might negatively impact margins in the following quarters.
- The stock is revisiting its IPO price which might be a strong area of support and the high short interest might help establish a bottom.
- Low forward valuation and significant growth potential make Cheetah a great investment opportunity at current levels.
- Cheetah Mobile shares have dropped in the last three months, but this could be a buying opportunity for investors with a high risk appetite.
- Shorts are piling into Cheetah, and it is expensive on a valuation basis.
- Cheetah, however, is expected to deliver strong earnings growth due to improving mobile monetization.
- Cheetah's partnerships with the likes of Baidu and Tencent and its focus on the gaming market can help it achieve strong monetization.
- The lockup expiration for CMCM expires November 28.
- Shareholders could use the lockup expiration to take profits and/or avoid further declines.
- Long-term, we see CMCM continuing to grow at a strong rate.
- In the near-term, we see a short play emerging for CMCM investors.
Cheetah Mobile Q3 2014 Review: That Doesn't Impress Me Much
- CMCM's headline Q3 once again suggests deteriorating operating metrics and engagement level.
- Competitive pressure heating up from BIDU and QIHU. Expect higher investments ahead.
- Short CMCM. Weak operating metrics makes financial metrics unsustainable.
- I recommended taking profits in Cheetah Mobile at $29/share in August.
- The stock has plunged since then, falling 40%.
- Nothing fundamental has changed during the decline; this is a buying opportunity.
- A newly announced partnership with Kingsoft serves as the catalyst for a turnaround.
Cheetah Mobile: Betting On US Growth With PC Software
- Cheetah Mobile has introduced a PC version of its Clean Master app.
- I see minimal impact, given heavy competition and lack of awareness among US users and lack of tech sophistication.
- Prefer Qihoo over Cheetah Mobile in China's mobile security space.
Take Profits In Cheetah Mobile And Buy Its Twin, Xunlei
- I recommended Cheetah Mobile (CMCM) in June at $21, it has rallied 40% since then.
- CMCM remains a compelling growth story, last quarter's earnings blew out estimates.
- That said, valuation may be stretched and CMCM has become a battleground stock with short sellers.
- I have taken profits on CMCM and reallocated much of my Chinese internet exposure to Xunlei (XNET).
- XNET is a similar story with same backers as CMCM that has not yet rallied, making this a fortuitous entry point.
Cheetah Mobile: This Fast-Growing Chinese Internet Company Can Be A Growth Pick
- The growing demand for internet security and mobile advertising has opened up a big opportunity for Cheetah Mobile.
- Cheetah Mobile is doing its best to tap the opportunity ahead with impressive product development and acquisitions.
- Cheetah Mobile's growth projections are hugely impressive along with its forward valuation.
Cheetah Mobile Q2 2014: Rationalization Kicking In
- CMCM's 2Q14 beat consensus with optimistic guidance for Q3.
- However, uncertainty over the monetization of the MAU base is beginning to reflect on the market sentiment.
- Reiterate my bearish view on the stock.
Cheetah Mobile Q2 2014 Preview: No Room For Errors
- CMCM will report Q2 on Tuesday with consensus expecting $0.03 EPS on $55m in revenue.
- Key focus are mobile MAU growth and potential MAU monetization, which currently stands at 0%.
- Long-term competitive risk from Baidu, Qihoo and Tencent a key concern.
- Despite being relisted on Google Ranks, GeoInvesting still thinks the company is a bad investment with an obsolete product.
- David continued that not only did Cheetah Mobile fail to make a disclosure, they did not respond to a direct request.
- US investors have been largely unaware for the same reason they were unaware that the app had been removed until GeoInvesting published its short thesis on July 31.
Cheetah Mobile: Will The Real Clean Master Please Stand Up?
- Reiterating my bearish view on CMCM. Analysis indicates mobile cleaner landscape lack unique differentiation, a negative to CMCM's Clean Master product.
- Favor companies with scale, brand and broad product portfolio as they are likely to leverage their network effect to have meaningful share in mobile security space.
- Monetization in the international market unlikely in the near-term as OEMs and carriers pre-install security apps, posing a challenge for CMCM's global expansion.
A Potential Impaling Blow To Cheetah Mobile As Flagship Product Removed From Google's App Store Rankings
- CMCM’s flagship Clean Master app was removed from Google Play’s top free app rankings, calling into question growth in its highly touted large overseas user base and future monetization potential.
- Outside of China, daily downloads from Google Play of CMCM’s six apps have fallen by approximately 88% following Google’s removal of Clean Master from the rankings.
- Management has not alerted investors to these negative developments that occurred since July 15, 2014, raising a significant corporate governance issue.
- There is a risk that the Clean Master app may be kicked out of the Google Play store if violations of store policies are not mitigated and resolved.
- Given the current undisclosed significant business risk, CMCM’s current valuation premium over QIHU is entirely unwarranted and we believe the stock is worth between $7.00 and $9.00.
Cheetah Mobile: This Cat Has A Long Way To Go; Initiating With $16 Target, 24% Downside
- I am initiating on CMCM with an anti-consensus Sell and a $16 target based on sum of parts.
- CMCM's PC and mobile ad business could see severe headwinds as 1) ad dollar continue to shift from PC to mobile and 2) competition from larger players.
- Consensus seems overly bullish on the stock, which allows room for estimates cut and de-rating if operating metrics begin to deteriorate.
Cheetah Sprints Higher As Investors Discover The Next Qihoo 360
- Cheetah Mobile starting to surge as investors discover the new IPO, but stock still underfollowed and undervalued.
- Cheetah is the next Qihoo 360, it operates in the same business and its CEO and CTOs were key players at Qihoo.
- Qihoo 360 shares quadrupled in the last two years. Cheetah exhibits similar revenue growth and other business metrics to Qihoo.
- Cheetah is profitable, 90-100% revenue growth next two years, forward PE of 25, and a PEG ratio of just 0.5 -- a compelling opportunity.
- Och-Ziff Capital Management's announcement after-close Monday of 5.2% stake in Cheetah provides new catalyst for further upside.
Quiet Period Expiration For Cheetah Mobile May Be Causing Surge Today
- Quiet period expiration for Beijing-based mobile app developer Cheetah Mobile ends on June 1.
- Cheetah Mobile has shown explosive growth and is well positioned to take advantage of China’s growing infatuation with the Internet.
- We believe this is a new chance to get a piece of a promising company.
- Beijing-based Cheetah Mobile plans to raise $162.0 million in its upcoming IPO.
- Cheetah Mobile is a mobile app developer focused on increasing mobile optimization and mitigating security threats.
- With impressive, consistent revenues and rising demand, we suggest investors strongly consider buying into this IPO.
- Diversified suite of mission critical applications optimizes internet and mobile system performance and provides real time protection against known and unknown security threats.
- Pre-IPO Kingsoft Corporation Limited owns 54% of CMCM. Kingsoft has a market cap of $29 billion.
- Income statement percent of revenue comparisons for the March '14 quarter vs. the March '13 quarter are not favorable for CMCM, except for revenue growth.
- The company is one of the early movers to develop and launch a pure cloud-based analytics engine for mobile applications.
- CMCM's future growth is expected to be driven by mobile growth and international business expansion.
- Investors are worried about Cheetah Mobile's ability to grow its mobile and overseas revenues and its ability to develop more popular and "hit" applications in the future.
- A successful business model combined with strategic partnerships, excellent execution records, and attractive valuations make Cheetah Mobile a worthwhile investment.
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