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    Stock Alert for THQ Inc. (THQI)

    THQ Inc. (THQI) is a worldwide developer and publisher of interactive entertainment software. The Company develops and publishes content for all popular game systems, including: home video game consoles such as the Microsoft Xbox 360 and Xbox 360 Kinect, Nintendo Wii, and Sony PlayStation 3 and PlayStation Move; handheld platforms such as the Nintendo DS, DSi and 3DS, and Sony PlayStation Portable; wireless devices based on the Apple iOS (including the iPhone, iTouch and iPad), Google Android, and Windows Mobile platforms; personal computers, including games played online; and the Internet, including on social networking sites such as Facebook.  In addition to titles published on the wireless devices noted above, THQI also develops and publishes titles (and supplemental downloadable content) for digital distribution via Sony’s PlayStation Network and Microsoft’s Xbox LIVE Marketplace and Xbox LIVE Arcade (XBLA), as well as digitally offers its PC titles through online download stores and services such as Steam.

    Share Statistics (18-Nov-11)   FY

    2010

    FY

    2011

    %

    Chg

    Q3

    2010

    Q3

    2011

    %

    Chg

    Symbol THQI Revenue, $Mn 899.14 665.26 -26.0% 77.05 146.00 89.5%
    Current price $2.00 Gross marg. 30.4% 21.9% -28.0% 14.7% -8.9% -160.5%
    52wk Range: $1.48-$6.53 Oper. margin -20.4% -66.4%
    Avg Vol (3m): 885,085 Net margin -1.0% -20.5% 1950.0% -61.0% -63.3% 3.8%
    Market Cap. 136.76M              
    Shares Outstanding 68.38M EPS, $ 0.01 -1.88 -18,900% -0.69 -0.87 26.1%

    Source: Reuters.com, SEC Filings.

    Investment Highlights

    Shares of THQI lost 1.96% to $2.00 in Friday’s trading, with volume of 2.20 million shares traded.  Over the last 52 weeks, the stock has reached a low of $1.48 and a high of $6.53. It is currently trading above its 50-day moving average of $1.97 and below its 200-day moving average of $2.72.

    Shares of the Agoura Hills, CA-based video game developer have lost 16.7% in the last five days, though the stock gained 9.9% in the last month.  Year-to-date, the stock is down 58.4%.

    The Company earlier this month reported fiscal 2012 second quarter revenues of $146 million, an 89% increase over $77.1 million in the comparable quarter last year.  On a non-GAAP basis, the Company’s net revenues were $119.6 million, compared with $70.4 million a year ago.  During the latest period, the Company released Warhammer 40,000: Space Marine, which, according to NPD, was a Top 10 title in North America in September.

    THQI topped analysts’ revenue forecast of $99.6 million.

    The second quarter, however, saw a net loss of $92.4 million, or $1.35 per diluted share, compared with a net loss of $47.0 million, or $0.69 per diluted share, in the year-ago period. On a non-GAAP basis, net loss for the quarter was $46.9 million, or $0.69 per diluted share, compared with a non-GAAP net loss of $40.6 million, or $0.60 per diluted share, in the same period a year ago.

    Analysts on average had expected the Company to report a loss of $0.83 per share.

    Looking forward, Brian Farrell, THQI president and CEO, commented: “Our two biggest quarters of the year remain ahead of us, and we are focused on execution. “In Q3 we are planning for the largest quarter in our history, in terms of sales and earnings, driven by Saints Row: The Third, the uDraw GameTablet, and WWE ’12. With UFC Undisputed 3 launching in the fourth quarter, we are well-positioned to deliver a strong second half of fiscal 2012.”

    Source: http://investor.thq.com/phoenix.zhtml?c=96376&p=irol-newsArticle&ID=1625257&highlight=

    Financial Strength (18-Nov-2011)

    Company

    Industry

    Sector

    S&P 500

    Quick Ratio (MRQ) 1.25 3.37 1.14 0.77
    Current Ratio (MRQ) 1.33 3.87 1.38 1.13
    LT Debt to Equity (MRQ) 136.28 10.20 59.75 109.25
    Total Debt to Equity (MRQ) 136.28 13.32 100.01 147.04
    Interest Coverage (TTM) -10.11 0.07 0.54 26.19

    Source: Reuters.com, SEC Filings.

    Technical Analysis

    Source: http://stockcharts.com

    THQI is near its lower Bollinger Band. This suggests that it is at a low level relative to recent action.

    THQI’s MACD is indicating a weak bearish signal. Although the indicator is above the critical level of 0, which implies that the underlying moving averages are bullish, the MACD has crossed below its 9-day moving average or signal line. This suggests that positive momentum has begun to slow.

    Comparative Analysis

    Company Name Ticker Price per Mrkt. Cap. P/E P/S
    Nov18-2011 symbol Share, $ $ Mn 2011 2012 2011 2012
    Activision Blizzard Inc. ATVI 12.05 13.79B 14.01 12.55 3.22 3.02
    Electronic Arts Inc. ERTS 21.99 7.29B 24.16 17.73 1.68 1.63
    Multimedia & Graphic Software Median       13.73 n/a 1.87 n/a
    THQ Inc. THQI 2.00 136.76M n/a 8.00 0.14 0.14

    Source: Thomson Financial

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