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Autohome Has Solid Fundamentals, But The Trend Is To The Downside

May 07, 2020 6:37 AM ETAutohome Inc. (ATHM)
Rick Pendergraft profile picture
Rick Pendergraft


  • Chinese automotive site Autohome has seen earnings and revenues grow in recent years, but they are both expected to be lower in the first quarter.
  • Sentiment toward the stock is rather skeptical with analysts, short sellers, and option traders all displaying bearish leanings.
  • The stock has moved lower for the last year with a trend channel forming over the last nine months.
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I have been using a three-pronged approach to analyze investments for almost 20 years now. I believe the best investments with the greatest odds of success come when you have the three analysis styles match. For a bullish investment, the fundamentals are strong, the chart shows a stock that is in an upward trend, and the sentiment shows that there is some form of pessimism being displayed toward the stock. For the sentiment, I use a contrarian view as I want bearish investors or analysts to flip to the bullish side and push the stock even higher.

When you use this approach, every once in a while, you will get a stock that confounds you as it has the fundamental strength you are looking for and it has the bearish sentiment that you want, but the stock is trending lower rather than higher. One such company for me is Autohome (NYSE:ATHM), the Chinese automotive website operator. The site offers new and used car listings as well as content and reviews of cars.

The company is expected to announce earnings next week, but I wasn’t able to confirm the earnings date on Autohome’s investor relations page. The Wall Street Journal, StockEarnings.com, and Seeking Alpha all have the estimated date as Wednesday, May 13. Hopefully, this estimate is accurate.

Analysts expect the company to report earnings of $0.76 per share for the first quarter and that is down slightly from the $0.85 the company reported in Q1 2019. Revenue is expected to come in at $220.07 million after coming in at $234.21 million one year ago. If we break down those estimates, analysts expect a 10.5% decline in earnings and a 6% decline in revenue for the quarter when compared to last year.

Autohome has been able to grow its earnings and

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This article was written by

Rick Pendergraft profile picture
Rick Pendergraft is a Senior Editor on the Opinion & Analysis team at Seeking Alpha. Prior to joining Seeking Alpha, he studied, traded, analyzed, and wrote about the investment markets for over 30 years. He has worked for some of the largest financial publishers in the world and he has been quoted in the Wall Street Journal, USA Today, the New York Times and the Washington Post. In addition, he has been interviewed on Bloomberg, CNBC and Fox Business News. After starting college as an education major, wanting to teach economics, Rick eventually changed to majoring in Economics and received a Bachelor of Science in Economics from Wright State University. His desire to inform and educate people is at the heart of his writing.

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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