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Tencent Holding (TCEHY) Outpaces Stock Market Gains: What You Should Know

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Tencent Holding (TCEHY - Free Report) closed at $45.36 in the latest trading session, marking a +0.91% move from the prior day. This move outpaced the S&P 500's daily gain of 0.38%. Elsewhere, the Dow lost 0.04%, while the tech-heavy Nasdaq added 0.73%.

Coming into today, shares of the company had gained 8.44% in the past month. In that same time, the Computer and Technology sector gained 2.98%, while the S&P 500 gained 3.19%.

Wall Street will be looking for positivity from TCEHY as it approaches its next earnings report date. In that report, analysts expect TCEHY to post earnings of $0.36 per share. This would mark year-over-year growth of 12.5%. Meanwhile, our latest consensus estimate is calling for revenue of $13.57 billion, up 17.37% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $1.45 per share and revenue of $57.55 billion. These totals would mark changes of +23.93% and +21.83%, respectively, from last year.

It is also important to note the recent changes to analyst estimates for TCEHY. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. TCEHY is currently a Zacks Rank #3 (Hold).

Looking at its valuation, TCEHY is holding a Forward P/E ratio of 30.95. Its industry sports an average Forward P/E of 28.72, so we one might conclude that TCEHY is trading at a premium comparatively.

Investors should also note that TCEHY has a PEG ratio of 1.32 right now. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Internet - Services industry currently had an average PEG ratio of 2.75 as of yesterday's close.

The Internet - Services industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 61, putting it in the top 24% 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.

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