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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 the most recent trading day at $42.79, moving +1.09% from the previous trading session. This move lagged the S&P 500's daily gain of 1.3%. At the same time, the Dow added 1.21%, and the tech-heavy Nasdaq gained 1.39%.

Heading into today, shares of the company had lost 5.6% over the past month, lagging the Computer and Technology sector's loss of 4.48% and the S&P 500's loss of 4.84% in that time.

TCEHY will be looking to display strength as it nears its next earnings release. On that day, TCEHY is projected to report earnings of $0.35 per share, which would represent year-over-year growth of 9.38%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $13.34 billion, up 15.43% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $1.46 per share and revenue of $57.23 billion. These totals would mark changes of +24.79% and +21.13%, respectively, from last year.

Any recent changes to analyst estimates for TCEHY should also be noted by investors. 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.

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. The Zacks Consensus EPS estimate has moved 0.26% lower within the past month. TCEHY is currently a Zacks Rank #3 (Hold).

In terms of valuation, TCEHY is currently trading at a Forward P/E ratio of 29.04. Its industry sports an average Forward P/E of 28.19, so we one might conclude that TCEHY is trading at a premium comparatively.

Investors should also note that TCEHY has a PEG ratio of 1.24 right now. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. TCEHY's industry had an average PEG ratio of 2.82 as of yesterday's close.

The Internet - Services industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 149, which puts it in the bottom 42% 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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