Analyst: NQ Mobile To See Revenue Growth, Wider Margins

NQ Mobile Inc (NYSE: NQ) is likely to post rapid revenue growth and improving margins in 2015, an analyst said Wednesday.

Topeka's Fred Ziegler reiterated a Buy rating on the Chinese-based mobile platform provider, but cut his price target nearly 12 percent to $7.50, citing more shares outstanding.

NQ posted better-than-expected results March 18, and forecast first-quarter revenue of $85 million to $86 million, up nearly 160 percent from a year earlier.

For 2015, NQ forecast revenue of between $450 million and $455 million, up about 130 percent.

NQ's Vice President of Capital Markets told analysts earlier this month that gross margins will "stabilize and recover" in 2015, in both its business segment and in consumer services, where user growth has been high, but where "there has not been material monetization."

Ziegler and Rosenblatt Securities's Jun Zhang were the only two analysts participating in the company's recent quarterly conference call.

With a market capitalization of $300 million, NQ has been plagued in recent months by fraud allegations from short-seller Carson Block of Muddy Waters Research, as well as a restructuring late last year that saw the sale of its FL Mobile gaming unit.

Block was silent following NQ's recent earnings release.

Shares are off about 79 percent during the past year, and trade at about $1 per share above the value of the company's cash, according to Ziegler.

NQ changed hands recently at $3.77, up $0.02.