Linktone Q4 Earnings on Monday

Linktone is set to announce its Q4 earnings after market close on Monday, February 28th. I don't see much downside from Friday's closing price of $7.03, while the upside potential is tremendous. Despite its problems with China Mobile, which I see as more than discounted by LTON's current stock price, Linktone remains one of the bigger players in a fragmented, rapidly growing industry.

LTON's market capitalization is around $177M. With $75M in cash (almost $3.00 a share) and nominal debt as of Q3, Linktone's enterprise value is slightly north of $100M. If its profits were merely to stay at Q3 levels for the next three quarters, the company would be trading at an EV/E multiple of 9 [100M/(2.829M*4)]. Not bad for a company with topline growth of nearly 200% over the past year.

Full disclosure: I do not own shares of LTON.