Why YY Inc's Stock Growth is No Sure Thing

Shares of YY (NASDAQ: YY) recently surged to historic highs after the Chinese live streaming company's third quarter numbers crushed analyst expectations. Its revenue rose 48% annually, marking its strongest growth in seven quarters and topping expectations by $42 million. Its non-GAAP net income rose 47% to $96.1 million, or $1.59 per ADS, beating estimates by $0.14, and its GAAP net income climbed 59% to $95.6 million.

YY also provided rosy guidance for 37%-41% sales growth in the fourth quarter. Analysts expect its revenue and non-GAAP earnings to respectively rise 38% and 41% this year. But despite all those positive numbers, YY's stock trades at just 15 times next year's earnings -- making it seem like an undervalued hidden gem.

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Source: Fool.com