SINA Corporation (SINA - Free Report) is slated to release second-quarter 2017 results on Aug 9 before the opening bell. Last quarter, the company posted a positive earnings surprise of 178.57%. Moreover, it has delivered positive earnings surprises in three of the trailing four quarters, resulting in an average positive earnings surprise of 444.64%.
Furthermore, the company reported decent first-quarter 2017 results wherein adjusted net revenues of $275.4 million topped the Zacks Consensus Estimate of $263 million and increased 40.5% year over year.
Additionally, we note that SINA’s shares have gained 64.8% in the last one year; vastly outperforming the industry’s gain of 36.8%.
Let’s see how things are shaping up prior to this announcement.
Factors to Consider
SINA has a strong product pipeline and is also investing in product development and marketing. Plus, strong performance of its Weibo platform continues to be a big positive.
Moreover, we believe that SINA will benefit from growth potential of e-commerce, e-banking, online payment and online entertainment services markets in China. Furthermore, the booming gaming market in China is also a positive.
We also believe that Weibo’s monetization ability will continue to be a major driving factor for SINA amid intensifying competition from the likes of Sohu.com Inc. (SOHU - Free Report) and NetEase (NTES - Free Report) in the video and brand advertising market.
However, the company’s business is likely to be impacted by soft macroeconomic conditions in China. Also, significant restrictions on online search and other social-networking activities in the region remain concerns.
Our proven model does not conclusively show that SINA is likely to beat earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here as you will see below.
Zacks ESP: SINA has an Earnings ESP of 0.00% as both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 43 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: SINA has a Zacks Rank #3. Though Zacks Rank #1, 2 or 3 increases the predictive power of ESP, the company’s ESP of 0.00% makes surprise prediction difficult.
We caution against stocks with a Zacks Rank #4 or 5 (Sell-rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stock to Consider
Here’s a stock that you may want to consider as our model shows that it has the right combination of elements to post an earnings beat in its upcoming release.
Luxoft Holding, Inc. (LXFT - Free Report) with an Earnings ESP of +5.17% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank Stocks here.
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