CYOU: 4Q15 Results May Be In Line; Guidance for 1Q16 May Be Below; No New Drivers for Growth; Maintain Hold
CYOU will report 4Q15 results on Monday, February 1st before the markets open with a 7am EST conference call. In the near term, we don’t see any excitement in its game pipeline and results may lack upside. As such, we expect 4Q15 results to be at most in line with consensus. We believe that the company is going through another hurdle as it struggles to find a sustainable long term growth driver. While CYOU appeared to find some significant momentum in its mobile games in late 2014 and early 2015, the momentum has passed. We believe CYOU may continue to stagnate as it refines its game development. As such, we maintain our Hold rating.