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Tencent Holding (TCEHY) Gains But Lags Market: What You Should Know

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Tencent Holding (TCEHY - Free Report) closed at $42.45 in the latest trading session, marking a +0.28% move from the prior day. The stock lagged the S&P 500's daily gain of 0.45%. Elsewhere, the Dow gained 0.51%, while the tech-heavy Nasdaq added 0.42%.

Heading into today, shares of the company had gained 4.52% over the past month, outpacing the Computer and Technology sector's loss of 0.69% and the S&P 500's loss of 1.64% in that time.

TCEHY will be looking to display strength as it nears its next earnings release, which is expected to be March 20, 2019. On that day, TCEHY is projected to report earnings of $0.28 per share, which would represent no growth from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $12.31 billion, up 21.13% from the prior-year quarter.

It is also important to note the recent changes to analyst estimates for TCEHY. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. TCEHY is holding a Zacks Rank of #5 (Strong Sell) right now.

Digging into valuation, TCEHY currently has a Forward P/E ratio of 30.67. Its industry sports an average Forward P/E of 26.79, so we one might conclude that TCEHY is trading at a premium comparatively.

We can also see that TCEHY currently has a PEG ratio of 0.96. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. Internet - Services stocks are, on average, holding a PEG ratio of 2.15 based on yesterday's closing prices.

The Internet - Services industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 188, putting it in the bottom 27% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.




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