Back to top

Image: Bigstock

What Lies in the Cards for SINA This Earnings Season?

Read MoreHide Full Article

SINA Corporation is slated to release third-quarter 2017 results on Nov 7, before the opening bell. Last quarter, the company delivered a positive earnings surprise of 9.38%. Moreover, it has delivered positive earnings surprise in all the trailing four quarters, resulting in an average positive earnings surprise of 59.85%.

SINA’s second-quarter 2017 non-GAAP earnings of 70 cents per share surged a massive 159.3% from the year-ago quarter while non-GAAP net revenues grew 48% to $356.3 million.

Notably, SINA’s shares have gained 80.1% year to date, substantially outperforming the industry’s gain of 55.3%.

Let’s see how things are shaping up prior to this announcement.

Factors to Consider

SINA’s user base has increased driven by growth in the number of mobile users. According to CNNIC report, mobile users in China accounted for 96.4% of total 751 million Internet users as of August 2017. We believe that SINA’s popular mobile portal and service offerings will enable the company to capitalize on the growing mobile market.

Notably, strong performance of SINA’s Weibo platform continues to be a key growth driver. Advertising as well as non-advertising revenues continue to be driven by the momentum of the Weibo segment.

Moreover, SINA’s initiatives to place itself as a leading video platform in the region are expected to increase user engagement and drive growth for the company.

However, continuing investments in other verticals like Internet finance, automobile and sports will hurt profitability. Soft macroeconomic conditions in China and significant restrictions on online search and other social networking activities in the region remain concerns.

Further, the company is also seeing some headwinds with regard to obtaining new media rights for sports in China. Moreover, it faces tougher year-over-year comparison. In third-quarter 2016, the company’s revenues were largely driven by Olympic Games. The soon-to-be reported quarter did not see an event of such magnitude.

Additionally, SINA faces stiffening competition in most of its operational markets from companies including Tencent Holding Ltd., Sohu.com Inc. (SOHU - Free Report) and NetEase Inc. (NTES - Free Report) , which pose a severe threat.

Sina Corporation Price and EPS Surprise

Sina Corporation Price and EPS Surprise | Sina Corporation Quote

What Our Model Says

According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or #3 (Hold) has a good chance of beating estimates if it also has a positive Earnings ESP. The Sell-rated stocks (Zacks Rank #4 or #5) are best avoided.

SINA has a Zacks Rank #3 and an Earnings ESP of 0.00%, which makes surprise prediction difficult. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stock to Consider

Here is a stock which, per our model, has the right combination of elements to post an earnings beat this quarter:

Texas Instruments Incorporated (TXN - Free Report) with an Earnings ESP of +0.42% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Wall Street’s Next Amazon

Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.

Click for details >>


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Texas Instruments Incorporated (TXN) - free report >>

Sohu.com Inc. (SOHU) - free report >>

NetEase, Inc. (NTES) - free report >>

Published in