Renren Inc (NYSE: RENN) is having an overwhelmingly strong start to the trading session this morning, and for good reason. The comapny announced its unaudited earnings for the second quarter, highlighting nearly 600% growth in revenue year over year (YoY). Of course, the news excited investors who are sending the stock screaming for the top. Today, we’ll talk about:
- What we saw from the report;
- what we’re seeing from RENN as a result; and
- what we’ll be watching with regard to the stock ahead.
RENN Reports Unaudited Financial Results
As mentioned above, Renren is having a great start to the trading session this morning after releasing its unaudited financial results. Here’s what we saw from the report:
- Revenue – Revenue proved to be a big hit for RENN during the second quarter. throughout the quarter, the company’s revenues came to $135 million. That represents growth in the amount of 582% over revenue in the second quarter of 2017. The growth in revenue can be largely attributed to the initiation of a used auto sales business one year ago that led to revenues of $122.7 million in the second quarter of this year.
- P&L – In terms of gross profit, the company produced $5.4 million in the quarter. That figure was up 16% YoY. Operating losses came to $32.6 million with net income of $166.1 million, comparing well to a net loss of $17.2 million in the second quarter of 2017. Adjusted loss from continuing operations came to $19 million with adjusted net income at $177.5 million.
In a statement, Joseph Chen, Chairman and CEO at RENN, had the following to offer:
We are pleased that our revenues grew 582% year-over-year, supported by the addition of our used auto retail business one year ago. We have been able to leverage Renren’s past experience in integrating more technology into our auto business, including a mobile app for consumers to browse for autos and purchase value-added services, big data analytics to optimize procurement and an auto dealership SaaS platform that improve efficiencies in our dealership operations. Q2 also saw the disposition of almost all of our investments in private companies. We believe this will sharpen our management focus on our auto and SaaS operating businesses as we strive to create sustainable shareholder value for the long term.
What We’re Seeing From The Stock
One of the first lessons that we learn when we start to work in the market is that it’s important to keep a close eye on earnings news. After all, earnings reports are the most updated financial data we can get. So, a strong report could turn into a dramatic rise in value. That’s exactly what we’re seeing out of Renren today. As is normally the case, our partners at Trade Ideas were the first to alert us to the gains. At the moment (9:46), RENN is trading at $1.88 per share after a gain of $0.48 per share or 34.29% thus far today.
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What We’ll Be Watching For Ahead
Moving forward, the CNA Finance team will continue to keep a close eye on RENN. In particular, we’re interested in following the company to see if it can maintain the incredible rate of growth seen in the second quarter. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
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