The shares of Party City Holdco Inc. (NYSE:PRTY) and FireEye, Inc. (NASDAQ:FEYE) were among the active stocks of the last trading sessions. Party City Holdco Inc. (NYSE:PRTY) declined to -0.2% closing at the price of $10 whereas the shares of FireEye, Inc. (NASDAQ:FEYE) soared 0.15% with the increase of 0.03 points closing at the price of $19.9. Party City Holdco Inc. has currently decrease -35.28% in its stock over the period of 6-months while its rival FireEye, Inc. added 12.18% in the previous 6-months.
Now we have to analyze the facts that if the stocks were worthy off investors’ money? The facts to analyze here are risks, profitability, returns and price trends.
Returns and Profitability
Profitability and returns are the main reason of investment, the investors are looking for profits that they get and return they should expect over the period of time.
The first and foremost return that is considered while making an investment is the ROI or Return on Investment. The ROI is the ratio between the profit against the cost of investment. Currently the ROI of Party City Holdco Inc. (NYSE:PRTY) is 7.8% while the ROI of FireEye, Inc. (NASDAQ:FEYE) is -18.6%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, PRTY’s EBITDA Margin is 7.78 whereas FEYE’s is -22.54.
Both the profitability ratios suggest that Party City Holdco Inc. (NYSE:PRTY) is more suitable investment in terms of profitability and return.
EPS & Surprise Factor
Party City Holdco Inc. (NYSE:PRTY) reported $0.08/share EPS for the previous quarter where analysts were predicting an EPS to be $0.18/share Thus lagging the analyst Estimates with a Surprise Factor of -55.6 Percent. While, FireEye, Inc. (NASDAQ:FEYE) reported EPS of $0.06/share in the last quarter. The analysts projected EPS of $0.02/share depicting a Surprise of 200 Percent.
Taking a look at Earnings per Share, FireEye, Inc. tends to be beating the analyst estimates more than Party City Holdco Inc.. so FEYE is more profitable than PRTY.
Technical Analysis of Party City Holdco Inc. & FireEye, Inc.
Moving average convergence divergence (MACD) shows that Party City Holdco Inc. (NYSE:PRTY) is on a PRICE RELATIVITY trend While FireEye, Inc. (NASDAQ:FEYE) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Party City Holdco Inc. was in BEARISH territory and FireEye, Inc. was in BULLISH territory.
PRTY’s current statistics gauge that the stock candle is BULLISH with HIGH volatility. While FEYE’s candle is BEARISH with HIGH.
EPS Growth Rate: PRTY’s 21.8% versus FEYE’s 0%
Another shareholder value can be analyzed through the EPS growth rate; the next 5 years EPS growth rate is predicted by the analysts after the analyzing the previous trends. The next 5 year EPS growth rate of Party City Holdco Inc. (NYSE:PRTY) is predicted at 21.8% while FireEye, Inc. (NASDAQ:FEYE) stands at 0%. These numbers suggest that PRTY is more suitable investment in terms of EPS growth rate.
Financial Risk and Liquidity Concerns
The current ratio and the debt ratio are the two ratios that show the investor how quickly the company is able to payout its debt and how quickly it can cover its obligations. The current ratio of PRTY stands at 1.3 while FEYE is at 2 whereas the debt ratio of the prior is 1.93 while the debt ratio of the later is 1.42.
The values of the both ratios suggest that one is more liquid and other investment is more risk free.
While making an investment, another main factor to consider before investing is the analyst recommendation on the scale of 1 to 5 where 1 is strong buy, 2 is buy, 3 is hold, 4 is Sell and 5 is strong sell. Analyst recommend 2.2 for PRTY and 2.3 for FEYE which means PRTY has Hold rating whereas FEYE has Hold rating.
Another recommendation of analyst that is to be considered worthy is the price target. The mare price or price trend does not suggest the suitability of a stock. The price target set by analyst is also to be considered while investing as it suggests to what extent the stock will rise or fall in the near future. The price target set for PRTY is $18.28 which is 45.3% of its current price while FEYE has price target of 20.09 which is 0.95% of its current price.
Valuation is the process of determining the company’s worth for an investor, the valuation ratios give an insight to that worthiness.
PRTY currently has price to earning P/E ratio of 8.52 whereas FEYE has 0 while the forward P/E ratio for the prior stands at 4.87 and for the later it depicts the value of 105.85.
The price to Book P/B for PRTY is 0.97, Price to Sale is at 0.41 and for FEYE these ratios stand at 5.72 and 4.95.