Weibo Corp (WB - Free Report) has slipped to a Zacks Rank #5 (Strong Sell) and to add insult to injury the Zacks Style Scores for Growth and Value are both F's. Let's take a deeper look at this stock in this Bear of the Day article.
Description
Weibo Corporation operates as a social media platform for people to create, distribute and discover Chinese-language content. The Company operates in two segments: Advertising and Marketing Services, and Other Services. The company offers self-expression products; social products; discovery products; notifications; third-party online games. Weibo also develops mobile apps, such as Weibo Headlines; Weibo Weather and WeiDisk. It also provides advertising and marketing solutions, including social display ads and promoted marketing products. Weibo Corporation is headquartered in Beijing, China.
Earnings History
The earnings history for a stock plays a role in the Zacks Rank, but not as big as earnings estimate revisions.
That said, I see a good earnings history with the company topping the Zacks Consensus Estimate in each of the last four quarters.
Estimate Revisions
Changes in estimates from sell side analyts change the consensus number. When the consensus moves lower, the Zacks Rank tends to follow that movement.
Quarterly estimates for any stock don't carry that much weight, but it is good to look at them just the same.
WB has seen no movement in this quarter, but next quarter I see a decrease in the Zacks Consensus Estimate. The number moved from $0.74 to $0.67 over the last 60 days.
The full year 2020 numbers have slid from $2.37 to $2.18 over the same time period.
2021 numbers have dropped from $2.97 to $2.78.
When estimates fall, the Zacks Rank also tends to fall.
Valuation
I see a forward PE of 16.5x which is cheap for a tech name like this, but I also see topline contraction of 19% in the most recent quarter. That is not something any investor wants to see. Margins have slipped over the last few quarters and that pattern can lead to lower EPS even without the revenue decreases, but when there are fewer revenue dollars and smaller margins, EPS numbers can fall dramatically.
Chart
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It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
Weibo Corp (WB - Free Report) has slipped to a Zacks Rank #5 (Strong Sell) and to add insult to injury the Zacks Style Scores for Growth and Value are both F's. Let's take a deeper look at this stock in this Bear of the Day article.
Description
Weibo Corporation operates as a social media platform for people to create, distribute and discover Chinese-language content. The Company operates in two segments: Advertising and Marketing Services, and Other Services. The company offers self-expression products; social products; discovery products; notifications; third-party online games. Weibo also develops mobile apps, such as Weibo Headlines; Weibo Weather and WeiDisk. It also provides advertising and marketing solutions, including social display ads and promoted marketing products. Weibo Corporation is headquartered in Beijing, China.
Earnings History
The earnings history for a stock plays a role in the Zacks Rank, but not as big as earnings estimate revisions.
That said, I see a good earnings history with the company topping the Zacks Consensus Estimate in each of the last four quarters.
Estimate Revisions
Changes in estimates from sell side analyts change the consensus number. When the consensus moves lower, the Zacks Rank tends to follow that movement.
Quarterly estimates for any stock don't carry that much weight, but it is good to look at them just the same.
WB has seen no movement in this quarter, but next quarter I see a decrease in the Zacks Consensus Estimate. The number moved from $0.74 to $0.67 over the last 60 days.
The full year 2020 numbers have slid from $2.37 to $2.18 over the same time period.
2021 numbers have dropped from $2.97 to $2.78.
When estimates fall, the Zacks Rank also tends to fall.
Valuation
I see a forward PE of 16.5x which is cheap for a tech name like this, but I also see topline contraction of 19% in the most recent quarter. That is not something any investor wants to see. Margins have slipped over the last few quarters and that pattern can lead to lower EPS even without the revenue decreases, but when there are fewer revenue dollars and smaller margins, EPS numbers can fall dramatically.
Chart
Biggest Tech Breakthrough in a Generation
Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.
See 8 breakthrough stocks now>>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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